Tuesday, June 8, 2010

Fitch Ratings Warning: U.K. on The Brink, Faces Enourmous Fiscal Challenges

Agencia Estado in Brazil reports today that Fitch Ratings agency said the fiscal challenge facing the UK government is enormous and justifies a strong strategy of consolidation in the medium term, including a faster pace of deficit reduction than determined in the budget released in April this year.

Fitch recommended that the United Kingdom reduce the amount of loans by a further 1% of Gross Domestic Product (GDP) per year to maintain its AAA rating. The warning from Fitch came at a time when the UK government prepares new details about how to solve a budget deficit which reached 156 billion pounds ($ 224.9 billion) in the last financial year.

Moreover, the comments came a day after Prime Minister David Cameron said that Britain may have to pay 70 billion pounds in interest by 2015 unless they act quickly to manage their debts.

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