A ratings agency has downgraded the UK’s credit rating following the chancellor’s widely criticised “mini-Buget”.
Fitch lowered the outlook for its credit rating for British government debt to “negative" from “stable" on Wednesday.
It comes days after a similar move from rival Standard & Poor’s following Kwasi Kwarteng’s financial statement to MPs in the Commons on 23 September.
At the end of last month Moody’s, another ratings agency, criticised the UK government over its unfunded tax cuts.
In a stinging rebuke to Mr Kwarteng’s plans, Fitch said: “The large and unfunded fiscal package announced as part of the new government’s growth plan could lead to a significant increase in fiscal deficits over the medium term.”
Meanwhile, the Bank of England has said that its intervention last month in the gilt market prevented a “self-reinforcing spiral” which could have wiped out the value of a large number of funds held by pension companies.
The Bank said in a statement on Thursday: “Once the purchase programme is complete, the operation will be unwound in a smooth and orderly fashion once risks to market functioning are judged by the Bank to have subsided.”
