Did nobody tell S&P the glass is half full?
Barely 45 minutes after S&P bowled them over, HM spinners are on the case. Helpfully they’re telling us what the rating agency means when it says its putting the UK’s ratings on negative watch:
The rating could be lowered if we conclude that, following the election, the next government’s fiscal consolidation plans are unlikely to put the U.K. debt burden on a secure downward trajectory over the medium term… Conversely, the outlook could will be revised back to stable if comprehensive measures are implemented to place the public finances on a sustainable footing, or if fiscal outturns are more benign than we currently anticipate.
Correct! It’s an opportunity for an upgrade. And everyone likes an upgrade. The official Treasury statement, via Reuters:
There are significant uncertainties in the global economy at the present time and S&P point out that the current outlook could be revised back to stable ‘if fiscal outturns are more benign than (they) currently anticipate.
The budget set out a clear plan to halve the deficit in five years. That judgement was based on a deliberately cautious view of the public finances.