Britain's budget plan restores credibility but risks remain -Moody's

© Reuters. FILE PHOTO: The logo of credit rating agency Moody’s Investor Services is seen outside the office in Paris October 24, 2011. REUTERS/Philippe Wojazer

LONDON (Reuters) – Britain’s budget plan for tax increases and tighter public spending announced on Thursday goes some way to restoring the country’s economic credibility, but risks remained due to the tough outlook, rating agency Moody’s said.
“The ambitious fiscal consolidation outlined today by the UK chancellor is a further step towards demonstrating the UK’s commitment to fiscal prudence after the UK’s policy credibility weakened following September’s fiscal statement,” Moody’s Vice President – Senior Credit Officer Evan Wohlmann said. “However, the polarised domestic political environment and heightened policy unpredictability may undermine efforts to deliver on fiscal consolidation, particularly in light of strong social and political pressures on government spending.”