Fitch Rating wants to downgrade UK

LONDON—Fitch Ratings Tuesday urged the U.K. to cut its borrowing by an additional 1% of gross domestic product per year if the country is to maintain its triple-A rating.




The ratings agency said the fiscal challenge facing the U.K. is formidable and warrants a strong medium-term consolidation strategy, including a faster pace of deficit reduction than set out in the budget released in April 2010.



A more ambitious deficit reduction path, "with borrowing 1% lower than the April 2010 Budget throughout the medium-term, would result in an earlier peak in debt to GDP and a clearly declining debt path," Fitch said in a statement. Fitch has a stable outlook on the U.K's rating.



U.K. stocks and the pound slumped following Fitch's statement. The U.K. FTSE 100 widened losses to trade down 1.2%, while the pound hit a session low of $1.4404.