London: Fitch Ratings, an international credit rating agency, Friday joined with Moody's in downgrading Britain's triple-A ratings, warning the 2.43-trillion-U.S. dollars economy's sluggish growth and burdensome fiscal austerity plan.
The move came shortly after the trading close of London Stock Exchange, of which benchmark index edged up 0.69 percent and snapped a five consecutive day down.
Fitch downgraded the country's long-term foreign and local currency Issuer Default Ratings (IDR) to ''AA+'' from ''AAA'', while maintaining its Outlook at Stable.
"The rating actions follow the conclusion of the review of the UK''s sovereign ratings initiated on 22 March and resolve the Rating Watch Negative. The previous Negative Outlook on the UK''s sovereign ratings had been in place since 14 March 2012." Fitch said.
The downgrade primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch's medium-term projections for Britain's budget deficits and government debt.
Fitch forecasted that general government gross debt would peak at 101 percent of GDP in 2015-2016 fiscal year, and would only gradually decline from 2017-2018 fiscal year. It had previously said that failure to stabilise debt below 100 percent of GDP and bring it further towards 90 percent in the medium term would trigger a rating downgrade.
Moody's, which cut Britain's triple-A credit ratings by one notch to Aa1 in February, also noted that the government's debt reduction program faced significant "challenges" and that British huge debts are unlikely to "reverse before 2016."
Britain grew merely 0.2 percent in 2012, and the government halved its forecast on the country's growth rate to 0.6 percent this year. Moreover, the government expected its net debt to begin falling in 2017-2018 fiscal year, a year later than previous planned.
Standard & Poor's, however, affirmed Britain's AAA sovereign credit rating, but maintained its "Negative" Outlook earlier this month.
First Published: Saturday, April 20, 2013, 23:20