S&P downgrades outlook on British economy

International ratings agency Standard and Poor's yesterday downgraded its outlook on Britain's economy to "negative" from "stable" owing to the country's "deteriorating public finances".

"The outlook revision is based on our view that, even factoring in further fiscal tightening, the UK's net general government debt burden may approach 100 per cent of GDP (Gross Domestic Product) and remain near that level in the medium term," S&P said in a statement.

Britain's public deficit ballooned to a record £8.5 billion (€9.6 billion) in April, according to official data published yesteday. The data, together with S&P's downgrade, sent the British pound and stocks sliding in London, traders said.

S&P credit analyst David Beers said the agency had based its revision on its "updated projections of general government deficits in 2009-2013".