Business · Markets · 2 days ago
S&P keeps Britain’s credit rating at AA/A-1+ with a stable outlook
S&P kept Britain’s long- and short-term credit ratings at AA/A-1+ and left the outlook stable.
The decision reflects S&P’s view that the UK economy can withstand an energy shock linked to conflicts in the Middle East while keeping growth reasonably strong.
High public debt, debt interest costs and limited room in the public finances are risks that balance this resilience.
S&P expects the UK economy to grow by 1.3% in 2026 and by an average of 1.4% a year from 2027 to 2029.
It expects the budget deficit to be 4.8% of the economy in the 2026 financial year, with efforts to reduce the deficit continuing from 2027 to 2029.
S&P also expects high oil and gas prices to keep affecting inflation and the Bank of England to raise its policy rate by 0.25 percentage points towards the end of 2026.
S&P affirmed the United Kingdom’s long- and short-term credit ratings at AA/A-1+ and kept its outlook stable.
The agency said it expects the economy to remain resilient to an energy shock caused by conflicts in the Middle East.
It expects real economic growth of 1.3% in 2026 and an average of 1.4% a year in 2027-2029.
S&P said that resilience is balanced by risks including limited fiscal room, high public debt and debt-servicing costs.
It expects the government budget deficit to reach 4.8% of GDP in the 2026 fiscal year and the Bank of England to raise its policy rate by 0.25 percentage points late in 2026.
- Who
- S&P, the credit rating agency, affirmed the United Kingdom’s credit rating.
- What
- It kept the rating at AA/A-1+ and the outlook stable.
- When
- The announcement was reported on October 9, 2026.
- Where
- United Kingdom.
- Why
- S&P said the stable outlook reflects the economy’s resilience to the energy shock and its expectation that growth will remain reasonably strong, balanced against fiscal risks.
This story does not have two clearly opposing sides.
The stable outlook reflects our assessment that the UK economy has remained and will continue to remain resilient to the energy shock from conflicts in the Middle East, with growth remaining reasonably strong
This story does not have a timeline yet.
- Credit rating
- AA/A-1+
- Outlook
- Stable
- 2026 growth forecast
- 1.3%
- 2027-2029 average growth forecast
- 1.4%
- 2026 fiscal-year budget deficit forecast
- 4.8% of GDP
- Expected Bank of England rate increase
- 0.25 percentage points late in 2026
Sources
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