Fitch Downgrades United Kingdom To ‘aa+’; Outlook Stable

on Friday night, a ridge of high pressure will build into Ireland and most of the U.K. beginning on Saturday and continuing through Sunday. With some sunshine expected, temperatures throughout the region will rise into middle teens to near 20 degrees C (59-68 degrees F) during the day across Ireland, Wales and England, making the weather favorable for leaf peepers and most any other outdoor activities. The average high for early October in London is approximately 15-16 degrees C (60 degrees F) while Dublin’s average high is typically around 15 degrees C (59 degrees F). Even parts of Scotland are expected to see some breaks of sunshine this weekend, though low clouds are likely to remain most stubborn across the western and northern coasts. High pressure should remain across England, Wales and most of Ireland into the first part of the next week, while Scotland will see some breaks of sunshine along with an isolated shower chance. OCT 3 1841 The “October Gale” hit southern New England. It was the worst ever to hit Nantucket. The storm raised havoc with the Cape Cod fishing fleet with 40 ships being washed ashore on Cape Cod and 57 men were lost from the town of Truro, Massachusetts alone. The storm caused heavy snow inland, with 3 inches at Concord, Massachusetts and 18 inches at Middletown, Connecticut. 1917 San Francisco, California had their highest ever October temperature reading. The mercury hit 96 degrees. 1963 Hurricane Flora, one of the deadliest hurricanes on record in the Atlantic Basin, battered Haiti with sustained winds around 145 mph.

The UK’s ‘AA+’ rating is underpinned by its high-income, diversified and flexible economy as well as a high degree of political and social stability. The monetary policy framework as well as sterling’s international reserve currency status afford the UK a high degree of financial and economic policy flexibility. Strong civil and policy institutions and a high degree of transparency enhance the predictability of the business and economic policy environment that compares favourably with peers in the ‘AA’ category. Weak economic performance and growth prospects, relatively high levels of private and foreign as well as public debt, along with sizeable twin fiscal and current account deficits, are weaknesses relative to rating peers. RATING SENSITIVITIES The Stable Outlook indicates a less than 50% chance of a change in the UK sovereign ratings over the next two years. The main factors that could lead to a negative rating action, individually or collectively, are: – Failure to stabilise the government debt to GDP ratio over the medium term. – Increased threat to macro-financial stability, for example arising from an intensification of the eurozone crisis or an erosion of confidence in the UK’s policy commitment to price stability. The main factors that could lead to a positive rating action, individually or collectively, are: – Stronger economic recovery and rebalancing of the UK economy than currently forecast. – Government budget deficits and debt declining at a faster pace than currently projected so that GGGD is on a sustainable path towards 90% of GDP and below. KEY ASSUMPTIONS A key assumption underpinning Fitch’s medium-term fiscal projections reflected in the ‘AA+’ rating and Stable Outlook is that the growth potential of the UK economy is around 2%-2.25% pa. This assumption is based on the UK’s labour market and demographic outlook and expectation that labour productivity will revert to its long-run trend of around 2% pa. In the event that productivity and hence economic growth is permanently lower than its long-run historical average prior to the financial crisis, the fiscal outlook would be materially worse than currently assessed with adverse implications for the UK’s sovereign credit profile and ratings.Global Economic Outlook – AmendedAdditional Disclosure Solicitation StatusALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here .