S&P Affirms Britain's Top-Notch Rating

Reuters

Standard & Poor's on Friday reaffirmed its top-notch AAA rating for Britain's debt, saying it expects the country's debt burden to peak in 2014 thanks to tighter fiscal policies.

The agency said its outlook for Britain's rating was stable, which "reflects our current expectation that the government will continue to consolidate public finances."

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It said that would help stabilize net public debt at just under 90 percent of output by 2014, adding that the "economic recovery will gain traction over the medium term."

While it said belt-tightening efforts would "likely drag on economic growth," it said the British economy's ability to absorb these shocks has improved, thanks in part to a large bond market and debt funded entirely in the domestic currency.

S&P expects "relatively modest" growth of about 1.6 percent between 2012 and 2015, though it called these projections "highly uncertain and subject to risks in either direction depending on domestic credit conditions and external developments."