Bankinter | Moody’s maintained its Aa3 rating with a stable outlook for the United Kingdom. The agency highlights strengths such as a rich, diversified economy and a solid institutional framework. It also notes the government’s commitment to reducing the deficit, with the budget due to be presented on Wednesday (26 November). In any case, its projections of moderate growth and a gradual reduction in the deficit lead it to estimate a continued increase in debt from around 103% of GDP in 2025 to just under 107% at the end of the decade.
Analysis team’s view: Good news, in line with the rating announced in October by S&P, which maintained its AA rating with a stable outlook. The British economy faces a high and sticky deficit (-5.75% in 2024) with slowing GDP growth (1.3% Q3 2025 versus 1.8% Q1 2025), putting debt/GDP above 100%. The presentation of the budget next Wednesday will set out the guidelines for fiscal consolidation and new stimuli for growth, opening up a new economic landscape for the United Kingdom.
Meanwhile, Moody’s has raised Italy’s rating to Baa2 with a stable outlook (from Baa3 with a positive outlook). The agency points to ‘political stability improving the efficiency of economic and fiscal reforms and investments implemented under the Recovery Plan’. It also highlights the ‘prospects for further policy actions that support growth and fiscal consolidation beyond the plan’s deadline in August 2026’. As a result, they expect high public debt to fall from 2027 onwards, estimating 130% of GDP in 2034 (vs 136.5% est. in 2025).
Analysis team’s view: This move marks the first upward revision of Italy’s rating since 2002. The improvement brings it back to the rating it had in 2018 and the same rating with a stable outlook since 2014. This change in trend is very positive news that reflects the improved outlook for the Italian economy. In 2024, Italy had a deficit of 3.4% and a debt-to-GDP ratio of 134.9% with weak GDP growth of 0.7%. In its review of estimates last week, the European Commission projected a deficit of 3.0% this year, 2.8% in 2026 and 2.6% in 2027, with a debt-to-GDP ratio of 136.4%, 137.9% in 2026 and 137.2% in 2027, as primary surpluses are still insufficient to offset the increase in debt interest and the adjustment for tax credits for housing renovation.
