AAA rating under threat
Market confidence and low borrowing rates are more important than the UK’s credit rating, George Osborne has said.
After the Office for Budget Responsibility warned the Government would not meet its target of reducing debt as a percentage of GDP by 2015, credit rating agency Fitch warned the UK’s AAA rating was under threat. Fitch said the new outlook “weakens the credibility” of the UK.
But the Chancellor today pointed to the UK’s low interest rates as proof that markets retained confidence in the Government’s economic policies.
“We’re borrowing money at the moment at some of the lowest interest rates in British history, because when people look around the world, and they look at countries to invest in, they think Britain is a good investment,” he told BBC Breakfast.
Downing Street took a similar line this morning, insisting that there were other ways to assess a country's economy.
The Prime Minister's Official Spokesman said: "The credit rating is one of a number of ways in which people look at countries. They also look at our interest rates and that rate at which we're able to borrow money. And we are currently borrowing money at some of the lowest rates in British history.
"If you look at the current situation we are able to borrow money cheaply and that reflects the credibility we have because of the plan we are implementing
"And that credibility comes from the fact that we have announced spending measures and we are implementing them, we've announced changes to welfare and we are implementing them and we've announced change to taxes and we are implementing them. We are doing what we said we would do."
Asked if Number 10 disputed any element of the downgrading, the spokesman said: "Obviously rating agencies are independent and make their own judgement on these things."