UK Credit Rating Reaffirmed By S&P

Standard and Poor's has delivered a welcome boost to the chancellor George Osborne when it reaffirmed the UK's AAA credit rating.

In a statement, the ratings agency, which has stripped the US and France of their AAA status in the past twelve months, said the outlook for the UK's rating was "stable", suggesting that an imminent downgrade is unlikely.

"The stable outlook reflects our current expectation that the government will continue to consolidate public finances, enabling net general government debt as a percentage of GDP to stabilise by 2014, and that the economic recovery will gain traction over the medium term," S&P said.

The chancellor, who has faced a backlash over a series of controversial decisions in last month's budget, said the decision vindicated his deficit-cutting programme.

"This is a reminder that Britain is weathering the international debt storms because of the policies we have adopted and stuck to in tough times," he said.

S&P offered a strong endorsement of the coalition's stance: "We believe that the UK government maintains a strong commitment to implementing its fiscal mandate and has the ability and willingness to respond rapidly to economic challenges."

Its verdict differs from that of Moody's, which recently placed the UK on negative watch - signalling a possible downgrade - on fears that the recovery has petered out.

This article was written by Heather Stewart, for guardian.co.uk on Friday 13th April 2012 18.54 Europe/London