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25 Mar 2013
Forex Flash: Fitch UK negative watch decision not significant - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that Fitch´s decision to place the UK on a negative watch list is not significant news.
They note that it is the laggard among the top three agencies. S&P has put its AAA rating on review this past December and last month, Moody's had cut its rating. They add that Fitch says it hopes to complete its review by the end of next month. They write, “We think that what led to Fitch's review, the government's admission that it now projects slower growth and higher levels of debt, will lead to a downgrade in Q2. Separately, the service index is reported late in the week and, given the importance of this sector, a modest increase would be seen as a sign that another quarterly contraction has been avoided. The first estimate of Q1 GDP is April 25.”
They note that it is the laggard among the top three agencies. S&P has put its AAA rating on review this past December and last month, Moody's had cut its rating. They add that Fitch says it hopes to complete its review by the end of next month. They write, “We think that what led to Fitch's review, the government's admission that it now projects slower growth and higher levels of debt, will lead to a downgrade in Q2. Separately, the service index is reported late in the week and, given the importance of this sector, a modest increase would be seen as a sign that another quarterly contraction has been avoided. The first estimate of Q1 GDP is April 25.”