© Reuters. FILE PHOTO: People cross the road on London Bridge during the morning rush hour, with the City of London’s financial district in the background, in London, Britain, April 13, 2023. REUTERS/Henry Nicholls
LONDON (Reuters) – Ratings agency Fitch on Friday stuck with its negative outlook for Britain’s sovereign credit rating, citing a weak economy and lingering uncertainty around Brexit trade terms with the European Union.
Fitch left the ‘AA’ rating itself unchanged as part of a regular review. It expects Britain to enter a mild recession this year and suffer higher inflation than its peers.
“Strengths are set against high public and external debt, and remaining uncertainty regarding the final form of the UK-EU economic relationship post-Brexit,” Fitch said in a statement.
While Britain has avoided the recession widely expected late last year, most forecasters like Fitch still think its economy is susceptible to higher inflation and slower growth than many of its peers.
Britain and Italy both had the highest rate of consumer price inflation among the world’s seven largest advanced economies in April.
British economic output during the first quarter remained slightly below its pre-pandemic level in late 2019, a record shared only by Germany among the Group of Seven.
Earlier on Friday, Fitch and rival ratings agency Standard and Poor’s (NYSE:) affirmed negative outlooks for the United States and France, respectively.
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