UK debt: Rating agency warning

Posted on 22. May, 2009 in General News

A leading credit rating agency has revised down its outlook for the UK economy due to concerns about its significant debt burden.

Standard and Poor’s downgraded its view of the UK to “negative” from “stable” for the first time since it started analysing its public finances in 1978.

It said the UK’s finances were deteriorating faster than expected.

The change came as data confirmed that new government borrowing has soared, to a record of almost £8.5bn in April.

The Office for National Statistics (ONS) said public sector net borrowing rose to £8.46bn this April compared to £1.84bn in the same month last year.

Government coffers have been hit by higher social benefits payments and lower tax receipts as unemployment has risen and businesses have closed or reduced output.

S&P said the outlook for the UK economy had deteriorated because of massive borrowing to deal with the recession and the banking crisis.

BBC: Thursday, 21 May 2009

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