JNN 04 Oct 2012 London : Britain’s credit rating faces an increased risk of being downgraded and its debt is expected to peak at a higher level than previously predicted, a new report shows. Eight thousand British servicemen and women are to be fired under the new wave of defence cuts.
The Global rating agency Fitch Ratings said that the UK’s AAA level could be more at risk of a downgrade.
The rating company said, “The negative outlook on the U.K. rating reflects the very limited fiscal space, at the ‘AAA’ level, to absorb further adverse economic shocks in light of the U.K.’s elevated debt levels and uncertain growth outlook. Weaker than expected growth and fiscal outturns in 2012 have increased pressure on the U.K.’s AAA rating.”
The agency’s assessment comes after Britain posted its biggest August budget deficit on record last week. More pressure is being put on the Chancellor of the Exchequer, George Osborne, as the country’s economy continues to struggle to recover from a double-dip recession. Fitch gave its forecast of economic growth in the UK, as the rate is expected to shrink by 0.3 percent instead of rising by 0.8 percent.
Fitch said Osborne is very likely to miss his goal of starting to bring down net debt in the 2015-16 budget year. According to the Office for Budget Responsibility, the March budget is predicted to see debt peaking at 76.3 percent of Gross domestic product (GDP) in 2014-15.
It has now been discovered that the country’s Ministry of Defence (MoD) will make a single vast cut of 8,000 soldiers, in a attempt to reduce the amy to just 86,000 members, its smallest size since the Napoleonic wars, while another 4,000 UK soldiers will also lose their jobs before 2020.
Cutbacks issued by the MoD will include the loss of historical regiments, which is believed to shake the British army.
The vast cuts will affect every branch and regiment of the Regular Army. Thousands of troops will be forced to go from their regiments such as the Royal Welsh, the Royal Fusiliers, the Royal Engineers, the Royal Lancers and the Army Air Corps, which includes Queen Elizabeth’s grandson Prince Harry among its members.
The section called the Royal Electrical and Mechanical Engineers, is due to lose 600 of its most skilled personnel and at the same time, the Royal Logistics Corps will be greatly affected.
Serving UK soldiers, military experts and MPs have condemned the drastic cutting measures as a stab in the back for members of the British Armed Forces.