Fitch reduces UK credit rating from AA- to AA as a result of the budget impact of the coronavirus epidemic and continued uncertainty over Brexit.
The rating agency predicted that the UK’s economic output would be reduced by about 4 percent this year due to the outbreak, but analysts said that the government was concerned about Britain's financial fiscal stance before the government announced its financial plans to deal with the crisis. .
"The impact of the downgrade COVID-1 outbreak reflected a significant weakness in the public finances of the UK and the position in a financial draft that was prompted before the crisis was over," Fitch said.
The rating agency, which referred to the UK as a "negative outlook," added that the coronavirus outbreak had taken into account the near-term loss to the UK economy and chronic uncertainty over the post-Brexit UK-EU trade relationship.
Rishi Sunak, the hancellor, has unveiled $60 billion in new expenditures to tackle the crisis, which will deep into the UK's public finances. Fitch expects the
UK government's debt to grow to 9 percent of gross domestic product next year, up from 2.1 percent in 2019.
The Treasury said Saturday that measures taken to combat coronavirus were temporary and would increase orrow short-term, but were "the right course to protect our economy against permanent damage."
In the second half of the year, if the United Kingdom starts to open up initiatives to tackle the health crisis, next year's Fitch estimates growth will return to growth percentages. According to Fitch's estimates, the UK's Coronavirus Job Retention Scheme, a three-month program to support workers affected by the epidemic, will cost about 1.3 percent of GDP, according to Fitch's estimates.-Internet
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