United Kingdom credit rating affirmed at AA- by Fitch

Fitch Ratings has affirmed the United Kingdom’s long-term foreign-currency default rating at ‘AA-’ with a stable outlook. The agency cited the country’s large, highly diversified, and flexible high-income economy, along with the international reserve status of the pound sterling and a reliable macroeconomic policy framework, as key supporting factors.

However, Fitch noted challenges including high levels of public and external debt. The agency also highlighted political shifts, noting that the transition to Prime Minister Andy Burnham marks the sixth leadership change in just over a decade, though increased political stability is expected for the remainder of the current parliamentary term.

Economic forecasts from Fitch suggest GDP growth will be 0.9% in 2026 and 1.2% in 2027, rising to 1.4% in 2028. This growth is expected to remain below the 2.9% average for other ‘AA’ rated nations. Inflation is projected to rise to 3.7% by the end of the year due to energy price caps before receding toward the 2% target by 2028. The Bank of England is expected to maintain interest rates at 3.75% until 2026, with gradual reductions thereafter.