S&P reaffirms UK AAA but warns again on outlook

Ratings agency Standard & Poor's has retained an AAA sovereign credit rating for the UK but says there is still a one in three chance of a downgrade next year.

S&P said its expectations for average annual real GDP growth of over 2% between 2013-2016 are "notably higher" than when it last affirmed the UK's AAA rating in April. It also now expects public sector borrowing to drop by a further 1% of GDP in each of the next five years, meaning net general government debt will peak one year earlier in 2015 - at a lower level (89% of GDP) than previously assumed. However, the ratings agency has also retained a negative outlook in case its forecasts prove too optimistic. "The negative outlook reflects our view of at least a one-in-three possibili...