Newspaper article The Journal (Newcastle, England)

AAA Rating Is Boosted by 'Kill or Cure' Budget Cuts

Newspaper article The Journal (Newcastle, England)

AAA Rating Is Boosted by 'Kill or Cure' Budget Cuts

Article excerpt

THE UK's gold-plated AAA credit rating received a major boost after ratings agency Fitch said Chancellor George Osborne's Budget would "materially strengthen confidence" in the nation's public finances.

Fitch said the Budget - which will claw back pounds 120bn in tax hikes and spending cuts over the next five years - was a "strong statement of intent".

The firm's head of sovereign ratings, David Riley, said: "Fitch's preliminary assessment of today's Budget is that it sets out an ambitious deficit reduction path that, if delivered upon, will materially strengthen confidence in UK public finances and its 'AAA' status."

Fitch said the harsh measures unveiled by the Chancellor - including pounds 11bn in welfare savings, a two-year public sector pay freeze and a hike in VAT to 20% - were "substantial and enhance confidence in the outlook for UK public finances".

It said the deficit reduction was "materially stronger" than in Labour's last Budget in March, although it warned that October's comprehensive spending review would be critical in spelling out fuller details of the cuts. …

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