Britain unveiled its 2011 budget on Wednesday, showing slower growth and higher inflation, both of which would affect its efforts to rein in debt. On Thursday, Moody’s Investors Service said that the nation’s AAA sovereign debt rating and its stable outlook as well could be in jeopardy.
Reuters reported that the budget presented by Finance Minister George Osborne showed that inflation was running at more than twice the 2% target, and that growth forecasts for 2011 and 2012 had both been cut—the former to 1.7% from a November forecast of 2.1%, and the latter to 2.5% from a November prediction of 2.6%. Moody’s downgraded its own prediction for the country’s growth to 1.6% from 2.0%, and warned that deficit control would be critical.