United States' credit rating downgraded after debt ceiling stand-off

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The world's largest economy loses triple A credit rating

Article originally published by The Telegraph. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

02 Aug 2023

The United States’ credit rating has been downgraded after a stand-off between the Biden administration and Congress undermined confidence that a ballooning national debt will be repaid.

Ratings agency Fitch on Tuesday lowered the United States’ long-term foreign currency rating to AA+ from AAA.

It said: “The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to AA and AAA rated peers.”

The new US score is nonetheless higher than Fitch’s credit rating for Britain, which remains at AA-.

The decision comes after the United States narrowly avoided defaulting on its debt payment obligations for the first time in history, when the Senate in June agreed to suspend the government’s borrowing limit until January 2025.

The bipartisan agreement followed weeks of fraught negotiations over the debt ceiling between the Republicans and President Joe Biden