Fitch Ratings:
- revised its Outlook on the Bank of England's (BoE) Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to Negative from Stable
- affirmed the IDR at 'AA-'
Citing:
- Says fiscal package announced as part of new UK govt's growth plan could lead to significant increase in fiscal deficits over the medium term
- It forecasts average inflation to increase to 8.9% in 2022 before gradually declining to 4% in 2024 for UK
- It forecasts UK economy to contract in 2023 despite energy tariff support and proposed tax cuts
- Says UK's deep capital markets, absence of foreign debt and sterling's reserve currency status underpin the sovereign's strong financing flexibility
- says the reduced support for the ruling Con servitive party, the impact of cost living crisis among others could constrain the new UK PM's room for manoeuvre
