S&P Assigns Negative Outlook On Britian's AAA Credit Rating

S&P Assigns Negative Outlook On Britian's AAA Credit Rating

Britain's prized triple-A credit rating is facing potential downgrade, after three rating agency including Standard & Poor's cut its outlook on the country's rating to negative from stable on Thursday.

S&P sees high possibility that Britain will lose its triple-A rating, if it were to happen, would be a major embarrassment for George Osborne, U.K.’s Finance Minister.

Mr. Osborne imposed a tough austerity drive after taking office in 2010, saying that it would strengthen Britain's public finances and reduce deficit.

"The outlook revision reflects our view that we could lower the ratings on the UK within the next two years if fiscal performance weakens beyond our current expectations," S&P said.

Moody's said it will review its rating in the first few months of next year.

Fitch on the other hand said the government's Autumn Statement had "weakened the credibility of Britain's fiscal framework' and would reevaluate U.K. after Osborne's March 20 budget.

Both U.S. and France lost their triple-A ratings after the financial crisis, and later saw their bond yields plumb to record lows.

Britain, Germany and Canada are the only three countries securing triple-A debt rating by S&P ratings service.

“S&P endorses the government's strong commitment to implementing the fiscal mandate and specifically warn against slowing the pace and extent of fiscal consolidation,' U.K.’s treasury said.

Britain is expects to run a budget deficit of 7% of GDP this year, down from 11% at the peak of the financial crisis.