Ultima Markets[Market hotspot] Debt increase, UK Credit Rating may further increase...

from2020 year3Since the outbreak of the COVID-19 pandemic in May, the UK government debt has skyrocketed by over40%, reaching near2.6Trillion pounds（3.3Trillions of dollars), this is2020The highest level since the early s is roughly the same as the size of the country's annual gross domestic product.

Although some countries, including the United States, have higher debt to GDP ratios, the UK stands out because of its1/4Government debt is' indexed ', which means it is linked to inflation levels. previously18Last month, as prices in the UK skyrocketed, the government's repayment and interest rates on inflation linked bonds also soared.

In the most recent fiscal year, High inflation has led to the UK's debt service cost as a proportion of its GDP reaching its highest in over 40 years. As the country struggles with weak economic growth and approaching elections, its finances are under heavy pressure. Credit rating company Fitch（Fitch）It is stated that the proportion of debt service expenses to government revenue in the UK is higher than in any other developed economy.

The increasing debt burden in the UK puts it in a precarious position. If the country's credit rating is downgraded, it may further increase borrowing costs, although the impact may be limited. Earlier, Fitch cancelled the US Supreme CourtAAA At the time of rating, the increase in the debt ratio of the United States was one of the reasons. Fitch currently has a negative rating outlook for the UK, which means that the country's rating has shifted from the current AA- Downgrading to A Increased risk of level 1.

Moody's（Moody’s）And Standard&Poor's（S&P）Will be on10month20Fitch Ratings will release a UK rating update on12month1Daily release of rating updates.

  

(UKCredit rating, Fitch)

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