LONDON (MNI) – Senior Fitch Ratings Analyst Brian Coulton believes
that UK debt will stabilise in the wake of what he called the ‘strong’
emergency budget announced by the new government here.
Speaking to Bloomberg, Coulton said that Fitch took the view of the
Office for Budget Responsibility that the UK economic recovery would not
be very strong.
The comments followed Monday’s affirmation by S&P of the UK’s AAA
rating, although they also signaled that the UK is not yet completely
out of the woods as regards a possible downgrade in the future.
Coulton also touched on the issue of the EU bank stress tests and
said that the tests needed to be realistic and transparent but added
that the EU seemed to have learned the lessons of the US stress tests.
The latter, he said, had always set out a clear strategy for what
to do about those banks which emerged with any kind of problem from the
tests. Coulton noted that the German finance minister had already stated
that this would be the method pursued by the EU.
On the subject of Portugal – downgraded by Moody’s to A1 this
morning – Coulton said that the country had made ‘some progress’ in
fiscal terms but said that growth remained the ‘key risk’ for the
Portuguese outlook.
–London Bureau; tel: +442078627492; email: dthomas@marketnews.com
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