Pound Sterling worry Fitch warning. Pound Sterling fell against the greenback on Friday as rising risk of a downgrade the credit ratings of the UK, after Fitch Ratings warned of the potential that government debt will swell above estimates. Increased speculation that Moody’s will lower the rating of Spain after closing on Friday also helped dampen demand for riskier currencies.
Fitch still maintains rating ‘AAA’ Pound Sterling outlook remains negative. But the agency does not guarantee top rating would be able to survive until 2014.
“Negative outlook on the rating ‘AAA’ Pound Sterling reflects the limitations of the fiscal space to absorb economic shocks are worse, given the high levels of debt and uncertain growth prospects in the UK,” Fitch said in a statement. “The growth weaker than forecast and the fiscal year 2012 has increased the pressure on the rating of England.”
Going forward, investors will focus on the UK PMI survey to gauge the likelihood of the UK economy out of recession.