Rating Agencies Flag Burnham Risk to UK's AA Scores as Debt Nears 100% of GDP

3 articles · Updated · Reuters · Jun 16

Moody's, S&P, Fitch and Scope are assessing whether Andy Burnham's possible rise to UK prime minister could alter fiscal policy, though analysts say bond markets would likely curb any big spending shift.
100% debt-to-GDP and thin fiscal headroom are driving that scrutiny, with agencies focused less on campaign rhetoric than on whether deficits and debt start to worsen materially.
S&P said significant deterioration beyond its April forecasts of a 4.7% deficit and 1.1% growth could pressure Britain's AA stable rating, while Fitch said its AA- view assumes gradual fiscal improvement.
2022's Liz Truss bond-market turmoil still shapes the risk calculus, and Scope warned prolonged political uncertainty or a wider Iran-war shock could raise borrowing costs and make debt stabilisation harder.