Fitch: No breathing space for UK AAA

Ratings agency Fitch has said the updated fiscal and economic projections from the UK's Office for Budget Responsibility mark a "significant deterioration" in prospects.

In its response to the UK Autumn Statement, Fitch said the UK had exhausted its capacity to absorb further adverse economic and financial shocks while retaining its AAA status. However, the ratings agency said the government's policy response demonstrated its continuing commitment to making UK public finances more sustainable, adding that "the adoption of more realistic economic forecasts enhances the credibility of the consolidation effort". The OBR yesterday lowered its GDP forecasts for 2012 from 2.5% to 0.7%, with the 2013 growth forecast falling from 2.9% to 2.1%. The government ...