Moody's updates UK credit rating outlook

In a statement released by the credit rating agency, it was announced that the outlook for the UK's credit rating has been revised. It was noted that the UK's long-term local and foreign currency credit ratings were affirmed at "Aa3," while the outlook was changed from "negative" to "stable."

MEDIUM-TERM FISCAL PLAN EXPECTED

The statement indicated that this decision reflects Moody's view that policy predictability has been restored in the country following the increased volatility regarding the budget last year. It was further stated that the UK government is expected to continue establishing a medium-term fiscal plan within the framework of fiscal rules and under the independent oversight of the Office for Budget Responsibility.

AVOIDED RECESSION DESPITE ECONOMIC HEADWINDS

Meanwhile, another credit rating agency, Standard & Poor's (S&P), also affirmed the UK's long-term and short-term foreign and local currency credit ratings at "AA/A-1+" and its outlook as "stable." In a statement from S&P, it was noted that the UK economy has so far avoided a recession despite various headwinds such as high inflation, rapid tightening of monetary policy, and credit conditions.

The statement noted that the stable outlook reflects the expectation that the UK's budget deficits will steadily decline over the next two to three years, alongside the country's resilient economic performance despite various challenges.