Moody\'s say the UK might struggle to make planned spending cuts

Moody's say the UK might struggle to make planned spending cuts

Ratings agency Moody’s say Britain’s government might struggle to make the kind of cuts to public spending it has announced

This is as it seeks to keep narrowing its budget deficit.

British finance minister Philip Hammond said on Wednesday that he was on track to report the country’s lowest budget shortfall since 2002 for the 2017/18 financial year, at 2.2 percent of gross domestic product.

Excluding long-term investment, public finances are due to run a surplus next year, but Hammond still aims to lower the total deficit to 0.9 percent over the next five years so that debt as a share of gross domestic product (GDP) can fall faster.

Moody’s said this would be tricky, taking a similar line to the non-partisan Institute for Fiscal Studies a day earlier.

“It remains to be seen whether those cuts will be delivered, given the apparent strains on many public services after a decade of cuts and the political pressure on the government to increase funding for health care, defence and education,” the ratings agency said in a statement sent to media on Friday.

Moody’s downgraded Britain’s credit rating in September to Aa2, further below its top-notch AAA rating, saying the government’s plans to bring down its heavy debt load had been knocked off course and Brexit would weigh on the economy

Published: by Radio NewsHub
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