LONDON, Nov 14 (Reuters) – The UK government’s commitment to its own fiscal rules to balance the budget by 2029\/30 remains vital for the country’s AA- credit rating, credit agency Fitch said.<\/p>\n
UK bond markets reacted badly on Friday to a report that British finance minister Rachel Reeves had scrapped plans<\/a> to raise income tax rates in this month’s budget in a bid to avoid further political backlash for the government.<\/p>\n Sign up here.<\/a><\/p>\n “We\u2019re not saying that the growth side is not necessarily relevant, but for the way that we think about it, to have the commitment to the fiscal framework is very important,” Fitch’s head of Western Europe Sovereigns ratings Federico Barriga-Salazar told Reuters on Friday.<\/p>\n “If we see that there is less of that, then the risk on the fiscal side will be higher.”<\/p>\n Barriga-Salazar said there was bound to be plenty of “political noise” about plans<\/a> to fill the fiscal gaps, but that it didn’t fundamentally change Fitch’s baseline assumptions.<\/p>\n It reaffirmed the ‘stable’ outlook on its AA- UK rating in August, forecasting that the government’s deficit would narrow 0.6 percentage points to 5.3% of GDP this year, dropping to 4.7% in 2026 and 4.4% in 2027.<\/p>\n Those levels, however, are well above the 2% median AA rating bracket countries are predicted to have in 2027. The UK’s forecast 106% debt-to-GDP ratio at that point is also almost double the projected AA-rated sovereign median of 52%.<\/p>\n “We still think that they have that commitment to following the fiscal rules, so there, for example, we see less of a risk at the moment than in France.”<\/p>\n Reporting by Marc Jones; editing by Elaine Hardcastle<\/p>\n Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n Purchase Licensing Rights<\/a><\/a><\/p>\n Marc Jones is a senior global markets correspondent based in London with a focus on economics, central banks, policymakers, and crises. Previously he worked in Frankfurt covering the European Central Bank at the height of the euro zone turmoil, the UK companies desk during the initial phase of global financial crash. He started his Reuters career on the sports desk covering everything from soccer to cycling. <\/p>\n","protected":false},"excerpt":{"rendered":"LONDON, Nov 14 (Reuters) – The UK government’s commitment to its own fiscal rules to balance the budget…\n","protected":false},"author":2,"featured_media":182097,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[98767,79,84897,84146,82528,94004,82532,83116,179,18,55396,82520,82522,32356,82527,87582,82516,45748,85214,88436,19,17,83122,82507,82508,82518],"class_list":{"0":"post-182096","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-aaa","9":"tag-business","10":"tag-dbt","11":"tag-destortao","12":"tag-destoukbsm","13":"tag-destoukdnm","14":"tag-destouktpm","15":"tag-eco","16":"tag-economy","17":"tag-eire","18":"tag-emea","19":"tag-europ","20":"tag-ezc","21":"tag-fin","22":"tag-fr","23":"tag-frx","24":"tag-gb","25":"tag-gen","26":"tag-gfin","27":"tag-gvd","28":"tag-ie","29":"tag-ireland","30":"tag-mce","31":"tag-news1","32":"tag-pol","33":"tag-weu"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115553961499532192","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/182096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=182096"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/182096\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/182097"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=182096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=182096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=182096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}