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A warning by ratings agency Fitch that it may cut the UK's AAA credit rating in the coming weeks shows how deep the country's economic problems are, a Treasury spokesman said.
"This serves to underline that there are no easy answers to problems built up over many years.
"But we are, slowly but surely, fixing our country's economic problems," the Treasury spokesman said.
"As the Chancellor said at the Budget: it's taking longer than anyone hoped, but we're on the right track," he said in a statement after Fitch's announcement.
A Fitch Ratings statement outlined its reasons for placing the United Kingdom on a negative watch:
- Downward revisions of UK economic growth forecasts
- "Persistently weak" UK growth, "in part due to European growth"
A Fitch Ratings statement said its placement of the UK on a negative watch indicated a "heightened probability of a downgrade in the near term."
The Fitch ratings agency has placed the UK on a negative ratings watch, causing sterling to fall sharply.
A "negative ratings watch" means that the country is on review for a potential credit downgrade.
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It’s Friday, a rating agency has just issued a verdict on the British economy and sterling has slumped. That sounds bad – but is it?