UK tax cuts raise stakes for debt sustainability, Scope credit rating agency warns

British Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng visit Berkeley Modular, in Northfleet, Kent, Britain, September 23, 2022. REUTERS/Dylan Martinez/Pool

LONDON, Sept 27 (Reuters) - Britain's new tax cut and spending plans will push up its debt levels and raise the stakes in terms of the sustainability of the country's public finances, credit rating agency Scope said on Tuesday.

"We see UK debt-to-GDP returning to pandemic-era levels by 2027 whereas we had previously expected it to decline," Scope said in report titled "UK: tax cuts raise debt-sustainability stakes; growth, inflation challenges intensify."

In isolation, the deterioration in the outlook for the UK's public finances would be "significant" Scope added, although the country’s debt-to-GDP ratio would still be well below that of France which also has AA rating with a 'stable' outlook.

Reporting by Marc Jones

Our Standards: The Thomson Reuters Trust Principles.