Standard & Poor's downgraded UK outlook

The rating agency Standard & Poor's has revised the outlook on the UK's AA sovereign credit rating and has lowered it to "negative" from "stable". The experts’ decision was influenced by Liz Truss's plan for tax cuts to boost the economy as they believed it could result in the growth of the sovereign debt. 

According to the S&P estimates, the sovereign debt of the UK will tend to grow. Earlier, the agency expected the debt to decline as a share of gross domestic product from 2023. 

The experts said that additional risks were not reflected in the new fiscal forecast. For instance, weaker economic growth in the UK, which may result from further deterioration of economic conditions, or a significant increase in government borrowings fueled by market forces and a tightening of monetary policy may also negatively influence the debt.

The S&P forecast suggests that the UK will fall into a technical recession soon, with its GDP shrinking 0.5 percent in 2023.

The UK government made the statement reporting that tax cuts and long-term structural reforms to the areas of immigration and building permits should increase economic growth. However, according to the S&P experts, such actions will not produce impressive results, not in the short term.