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News: Ratings agency warns UK over economic "challenges".

Wed, 21 Dec 11

The UK has retained its AAA credit rating from agency Moody's.

But, in its annual guidance for investors, the agency warned that there were "formidable and rising challenges".

Despite this, Moody's gave the UK high scores for economic governance and said it had "significant structural strengths".

As a result, Moody's said that the UK deserved its top AAA rating.

Moody's concerns for the UK in the future come from the impact of weakness in the euro zone which could restrict growth and damage the Government's plans to cut debt.

"A need to support the banking system could temporarily set back the Government's fiscal consolidation efforts," it said.

"As a result, the outlook on the rating is likely to be sensitive to future developments in the euro area's debt crisis, even though the UK is not a member of the monetary union."

Last week Moody's placed the credit ratings of all euro zone countries under review.


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