After the Office for Budget Responsibility issued a stark assessment of the public finances, Fitch, an international ratings agency, said it will review Britain’s status next year and suggested a downgrade is now more likely, the Telegraph reports.
The OBR cut its predictions for UK economic growth again and said that even after a five-year Parliament of spending cuts and tax rises, the Government will still be borrowing one in every ten pounds it spends.
The Government’s debt – the total stock of its borrowing – will not fall as a share of the economy until 2016/17, the OBR said.
Osborne had promised to reduce the debt as a proportion of GDP by 2015/16, but admitted to MPs that he target will be missed by a year.
“Missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the rating,” Fitch said.