Goldman Sachs Says There's `No Guarantee' Britain Will Keep Its AAA Rating

There is “no guarantee” the U.K. will retain its AAA credit rating and the election campaign has revealed little about what the next government will do to cut the budget deficit, according to Goldman Sachs Group Inc.

With a U.K. election next week, Goldman Sachs economists Ben Broadbent and Adrian Paul said the U.K.’s prospects for fiscal retrenchment, economic growth and interest rates look a “little better” in general than Spain’s. Having a free- floating exchange rate will also benefit the U.K., they said.

“While that probably helps to explain why the U.K. has retained its AAA so far, it is no guarantee that it will over the future,” the London-based economists wrote in a note to clients late yesterday. “All three rating agencies have expressed concern about the existing government’s fiscal plans and the election campaign has brought us precious little clarity about what the next government will do.”

The U.K. ran a budget deficit of 11.5 percent of gross domestic product last year and has a government debt of 68.1 percent of GDP, according to the EU’s statistics office.

To contact the reporters on this story: Simon Kennedy in Paris at

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