Another blow for UK’s AAA credit rating

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Another nail has been hammered in the coffin of the UK’s AAA credit rating, despite hopes that this year will not be as bad, economists said after yesterday’s GDP figures.

All three ratings agencies have the UK on negative outlook and with yesterday’s figures showing the largest decline since last spring, there is more pressure on the Chancellor to find ways to revive the economy in his March budget.

Vicky Redwood, chief UK economist at consultancy Capital Economics, said: “The fact that the economy is contracting more than three years after the recession first ended suggests that the current policy stance isn’t working and more action needs to be taken.”

Markit chief economist Chris Williamson said yesterday’s data banged “another nail in the coffin” of the UK’s AAA rating.

He added: “At the moment, it remains too early to tell if the economy will triple-dip, but these numbers have greatly increased the risk of a new recession and a downgrading of the UK’s AAA credit rating.”