Moody's to review Britain's AAA rating

Moody's announced Wednesday that it will review Britain's Aaa rating early next year, saying the country's strengths were challenged by weak growth and the eurozone crisis. In its yearly credit report on Britain, the agency said its review would hinge in part on the government's upcoming Autumn Statement, its mid-term economic review. Moody's said the rating remained underpinned by "a large, diversified and highly competitive economy, flexible labor force and structural reforms that position it well to return to its long-term trend growth rate of 2-2.5% over the medium term." It also cited Britain's favorable debt structure and commitment to fiscal consolidation through mainly spending cuts. "Moody's expects these strengths to persist over the medium to long term," it said. But the country continues to face challenges from the financial crisis, which led to Moody's issuing a negative outlook for the sovereign rating in February, a warning that Britain's triple-A grade could be lowered in the medium term. Sarah Carlson, a Moody's analyst, praised the government's "strong commitment to fiscal consolidation." But she told AFP that the government effort might be "hampered by weaker-than-expected economic prospects as well as problems with the eurozone." Moody's said it "will revisit the AAA rating and outlook in the first few months of 2013 to assess the impact of these challenges and of the government's upcoming Autumn Statement," it explained.