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The ratings agency cut the outlook for Britain’s AA credit rating in September to “negative” from “stable”.
S&P’s top European sovereign analyst Frank Gill told Reuters that the UK’s external deficit was a worry, as was the country’s long-term competitiveness.
“There are long term questions about the competitiveness of the UK economy, … (on) why the weakness of sterling doesn’t seem to have really improved the overall balance of payments position,” said Gill.
S&P chief EMEA economist Sylvain Broyer said that while he expected a recession in the UK to last three to four quarters, a resilient labour market was a positive.
