The wealth status of the UK have been confirmed as AAA by rating agency Standard & Poors. This confirms their opinion on the UK as being wealthy, diversified, open with suitable debt management and controls in place.
They have confirmed they see the UK’s economic policy will continue to focus on closing the fiscal gap, with the potential of controlling the problems, with the likelihood of resolving the issues while providing a suitable infastructure where prosperity is plausible. The UK is seen to benefit from a large liquid market for government debt issuance, entirely funded in domestic currency at long maturities.
The agency believes the UK government will implement the bulk of its consolidation program and economic growth isn’t expected to fall below current projections.
The Good News – Standard & Poor’s have highlighted strong demand for long-dated gilts from both domestic and non-resident institutional investors.
The Bad News – the steep correction in the fiscal accounts is expected to cause a drag on economic growth; household spending is likely to be weak; and the UK will post modest real GDP growth (est. 1.6% between 2012 and 2015).
These are only estimates and will be reviewed regularly as there are many factors, which could significantly affect these figures, assumptions and estimates but for now the general view is GOOD NEWS.
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