Moody's lifts UK's outlook to 'stable' on restoration of policy predictability
(Reuters) -Ratings agency Moody's (NYSE:MCO) revised Britain's outlook to «stable» from «negative» on Friday, saying policy predictability has been restored after heightened volatility last year around the mini-budget under then Prime Minister Liz Truss.
«While structural spending pressures and relatively high inflation will pose risks to the government's ability to fully deliver on its fiscal plans, Moody's still expects fiscal policy to gradually tighten over the coming years,» the ratings agency said.
The government borrowed 81.7 billion pounds in the first half of the 2023/24 financial year, 15.3 billion pounds more than between April and September 2022, but 20 billion pounds less than the government forecast in March.
Moody's expects the government to formulate a medium-term fiscal plan with independent oversight from Britain's Office for Budget Responsibility, which will reduce downside risks to the country's fiscal prospects.
The agency affirmed the country's rating at «Aa3».
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