Credit rating agencies cautiously approved the British fiscal budget.

The three major credit rating agencies cautiously welcomed the budget announced by the UK last week, saying it is the result of the government's ongoing efforts to improve fiscal discipline, despite significant execution risks. Moody's was the last major rating agency to give its opinion last Friday, stating that the tax increases and spending plans in the budget are consistent with their decision a week earlier to maintain the UK's Aa3 rating with a stable outlook. The budget's tax measures are mainly focused on the later years, with some of the impact being offset by increased welfare spending, with the UK's deficit expected to decrease from 6% of GDP in 2024 to around 5% this year. By 2026, the deficit as a percentage of GDP is projected to decrease to around 4%, and continue to decline in the following years of the government's term. Moody's stated, "Such a gradual pace of fiscal consolidation means that the government's debt ratio will continue to rise, although only modestly," with Moody's predicting that by 2030, the UK's debt as a percentage of GDP will rise from around 103% this year to slightly below 107%. Fitch Ratings published its assessment report last Thursday, stating that the UK's budget "largely conforms" to its expectations, but also pointing out "significant execution risks." Fitch's rating for UK sovereign debt is AA-. S&P Global stated that despite significant new revenue measures, the fiscal pressure facing the UK's rating is expected to persist in the "medium term." Following the 2016 Brexit referendum, S&P downgraded the UK's rating from AAA to AA. The agency also warned that the government may choose to withdraw some of the announced tax measures before the next election.