LONDON - An acceptance by all Britain's main political parties of the need to repair the public finances means the country's triple-A rating is safe for now, Moody's senior vice president Kristin Lindow told Reuters.Even if Britain's upcoming election produces a "hung parliament" where no party has an overall majority, the country could still cling on to its top-notch status. "We suspect strongly that any government elected -- even a hung parliament -- would be ready to make adjustments to reduce the deficit," Lindow said on Friday. "That's behind our stable outlook, despite the extreme deterioration on the fiscal front."Moody's stance contrasts with that of rival agency Standard & Poor's which downgraded Britain's rating outlook to negative last May, citing the risk that government debt could soar close to 100 percent of gross domestic product.After a decade of preaching prudence as finance minister, Prime Minister Gordon Brown has had to sanction government borrowing rising to record levels as Britain's economy plunged into its worst recession since World War Two.Brown has promised to halve the deficit -- running at more than 12 percent of GDP -- by 2014, if re-elected, while faster and deeper cuts have been pledged by the opposition Conservatives, who have a narrow lead in opinion polls. RECOVERY WORRIESMoody's acknowledged that the "distance-to-downgrade" for all the large triple-A rated sovereigns had shortened over the past three months, and a fragile recovery could hamper the government's tax-raising potential. But it said the top-notch ratings of Britain and the United States, whose debt affordability is currently the most stretched, were supported by substantial "debt reversibility" -- the ability to repair the balance sheet.
LONDON - An acceptance by all Britain's main political parties of the need to repair the public finances means the country's triple-A rating is safe for now, Moody's senior vice president Kristin Lindow told Reuters.
Even if Britain's upcoming election produces a "hung parliament" where no party has an overall majority, the country could still cling on to its top-notch status. "We suspect strongly that any government elected -- even a hung parliament -- would be ready to make adjustments to reduce the deficit," Lindow said on Friday. "That's behind our stable outlook, despite the extreme deterioration on the fiscal front."
Moody's stance contrasts with that of rival agency Standard & Poor's which downgraded Britain's rating outlook to negative last May, citing the risk that government debt could soar close to 100 percent of gross domestic product.
After a decade of preaching prudence as finance minister, Prime Minister Gordon Brown has had to sanction government borrowing rising to record levels as Britain's economy plunged into its worst recession since World War Two.
Brown has promised to halve the deficit -- running at more than 12 percent of GDP -- by 2014, if re-elected, while faster and deeper cuts have been pledged by the opposition Conservatives, who have a narrow lead in opinion polls.
RECOVERY WORRIES
Moody's acknowledged that the "distance-to-downgrade" for all the large triple-A rated sovereigns had shortened over the past three months, and a fragile recovery could hamper the government's tax-raising potential. But it said the top-notch ratings of Britain and the United States, whose debt affordability is currently the most stretched, were supported by substantial "debt reversibility" -- the ability to repair the balance sheet.