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20 Dec 2013
S&P downgrades EU, affirms UK rating
FXstreet.com (Łódź) - Standard & Poor's rating agency announced in the European morning its decision to lower the EU supranational long-term rating to AA+. It has also affirmed UK's rating at AAA.
The downgrade of the EU rating to AA+ from AAA, with a stable outlook, was justified by a perceived deterioration of “creditworthiness of the EU's 28 member states.”
“In our view, EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states,” the S&P explained in the official statement.
“The stable outlook reflects our view that the capacity and willingness of highly rated member states offsets the risks at a 'AA+' level.”
The ratings agency emphasized however that the downgrade of the EU supranational would not affect the ratings of individual Member States.
The S&P also affirmed on Friday that it would maintain UK's sovereign credit rating unchanged at AAA, with a negative outlook, as the country's government “continues to benefit from its exceptional monetary flexibility”.
The UK economy is on a path to recovery “albeit largely on the back of private consumption and residential investment” while the risks to growth sustainability are the reason for keeping the outlook negative.
The downgrade of the EU rating to AA+ from AAA, with a stable outlook, was justified by a perceived deterioration of “creditworthiness of the EU's 28 member states.”
“In our view, EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states,” the S&P explained in the official statement.
“The stable outlook reflects our view that the capacity and willingness of highly rated member states offsets the risks at a 'AA+' level.”
The ratings agency emphasized however that the downgrade of the EU supranational would not affect the ratings of individual Member States.
The S&P also affirmed on Friday that it would maintain UK's sovereign credit rating unchanged at AAA, with a negative outlook, as the country's government “continues to benefit from its exceptional monetary flexibility”.
The UK economy is on a path to recovery “albeit largely on the back of private consumption and residential investment” while the risks to growth sustainability are the reason for keeping the outlook negative.