UK credit outlook 'stable' says Standard & Poor's

S&P building New York Image copyright Reuters
Image caption Standard & Poor's expects manufacturing and services to help the recovery

Credit agency Standard & Poor's upgraded the UK's credit outlook to "stable" from "negative" and kept its AAA assessment of borrowing strength.

The agency forecast that the UK economy would grow by almost 3% in 2014.

Rival agency Fitch said it kept its AA+ credit rating for the UK and gave it a "stable" outlook, citing the country's accelerating economic recovery.

S&P is the only major ratings agency to retain a AAA rating on British sovereign debt.

Growth forecast

"The restoration of a stable outlook to the UK's AAA rating means that S&P now attach a less than a one-in-three probability of a downgrade within the next two years," said Howard Archer, chief UK and European economist at IHS Global Insight.

"The outlook revision reflects our view of the robust and broadening recovery in the UK economy, and the further progress that the government is making on consolidating public finances," S&P said.

The agency also forecast that the UK economy would expand by 2.5% in 2015, led by business investment and private consumption.

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