Rating agency DBRS Morningstar on Wednesday placed the United Kingdom’s “AA (high)” rating under review with negative implications, taking action after the UK reversed most of the policies in its so-called “mini-budget.”
DBRS cited policy inconsistency, an uncertain fiscal outlook, ongoing turmoil in the UK government bond market, a sharp fall in the pound and higher market interest rates for the rating action.
In a dramatic U-turn in fiscal policy, Britain’s new finance minister Jeremy Hunt on Monday scrapped Prime Minister Liz Truss’s economic plan, in which she had proposed vast, unfunded tax cuts.
Ratings agencies S&P Global and Fitch had earlier lowered the outlooks for their credit ratings following Truss’s tax cut plans, with S&P forecasting Britain would enter a technical recession in the quarters ahead.
