Osborne hails UK (AAA) credit rating

UK finance Minister George Osborne has hailed confirmation today of Britain's gold-plated AAA credit rating by a key agency. The Chancellor said the verdict from the credit rating agency Standard and Poor's (SP) showed the "world has confidence" in the coalition's economic policies. The news is a boost to Mr Osborne after dire GDP figures prompted heavy criticism of his performance and the Government's austerity measures. Standard and Poor's said its outlook for the UK's coveted rating was stable and predicted the economy would pick up in the coming months. "We project that despite recent weakness, the UK economy should begin to recover in the second half of 2012 and steadily strengthen, and we expect economic policy to continue focusing on closing the fiscal gap," the agency said in a statement. "In our view, monetary flexibility remains a key credit strength owing to the British pound sterling's role as a global reserve currency". SP said its stable outlook for the rating reflected its "expectation that the UK Government will implement the bulk of its fiscal consolidation programme and that the economy should recover in the remainder of 2012 and strengthen thereafter". But it added "We could lower the ratings in particular if the pace and extent of fiscal consolidation slows beyond what we currently expect". Mr Osborne said "As Britain welcomes the world to our country for the Olympic Games, this is a reminder that despite the economic problems we face, the world has confidence that we are dealing with them. "The deficit has fallen by a quarter; inflation has fallen by half; employment is rising, with British businesses creating over 800,000 new jobs; and the economy is rebalancing, with Britain now exporting more to the rest of the world than Europe. "And as SP themselves say, what would damage Britain's creditworthiness would be relaxing our resolve to deal with our debts. We won't do that". Woeful growth figures released this week showed the UK economy sliding deeper into recession with a 0.7pct fall in GDP between April and June. The statistics prompted coalition opponents to call for a change in course from the "failing plan" to revive growth, while some Tories called for Mr Osborne to be replaced as Chancellor.