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Fitch Maintains UK Ratings At 'AA+'; UK Construction Output Up

June 13, 2014

LONDON (Alliance News) - Fitch Ratings on Friday affirmed the sovereign ratings of the UK with 'stable' outlook, citing its favourable macroeconomic trends.

The long-term ratings were maintained at 'AA+'.

Strong GDP growth, falling unemployment and inflation close to the 2% target continued in the economy since the last review in December 2013, Fitch said.

The rating agency said it judges growth to be partly cyclical, reflecting the gradual closing of the previous large output gap. Though the strengthening economic recovery supports the fiscal consolidation efforts, the fiscal deficit remains large compared with rating peers and the 'AA' median of a 1.5% surplus, it said.

Fitch expects gross general government debt, using the EU Treaty definition, to peak at 92%-93% of GDP in 2015-16 and to start falling in 2017.

The UK's ratings are underpinned by its high-income, diversified and flexible economy as well as a high degree of political and social stability, the agency said.

A report released by the Office for National Statistics Friday showed that construction output grew 1.2% in April from March, driven by a 0.9% rise in new work and a 1.6% rise in repair and maintenance. On a yearly basis, construction output climbed 4.6%.

GDP data released on May 22 estimated a 0.6% growth in construction output in the first quarter.

ONS said this has been revised to an increase of 1.5% in this release.

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Source: Alliance News

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