The "formidable challenge" of the UK deficit
More rigor. The message sent by the rating agency Fitch to the new British government is clear: "the magnitude of the fiscal challenge is formidable United Kingdom and justifies a strong austerity plan in the medium term." For, if London enjoys a triple-A thanks to its economy "diverse and flexible, its deficit is growing at a pace well above that of other countries enjoying the same note, the agency warns. It reached 11.1% of gross domestic product (GDP).
"The existing plans are not ambitious enough," Judge Fitch, who still welcomes the willingness of the new Liberal-Conservative coalition to act very quickly. Even in London announced new austerity measures amounting to 0.4% of GDP in the form of budget cuts.
Under a new emergency budget to be presented June 22, the government should adopt targets for reducing the deficit more ambitious, Fitch recommends. The new conservative prime minister has already promised gold and years of "suffering" the British people.
"While other European countries are strengthening their plans and rigor that markets are concerned about the sovereign risk in developed countries, the size of the UK deficit is currently estimated for 2011 and failure to return to the 3% deficit the next five years are worrisome, "Fitch alarmed.