The credit rating of the U.K. may be downgraded

Britain could lose its cherished top-tier credit rating that provides access to cheap borrowing on international markets after a downgrade of its economic outlook by Standard & Poor's today. The ratings agency expressed alarm about the country's ballooning budget deficit and switched its outlook from "stable" to "negative"...

S&P credit analyst David Beers said the ratings agency had based its outlook revision "on our view that, even factoring in further fiscal tightening, the UK's net general government debt burden may approach 100% of GDP and remain near that level in the medium term"...

John Hawksworth, head of macroeconomics at PwC, said there would need to be a "fiscal squeeze" – a combination of tax rises and public spending cuts – building up to between £115bn and £133bn a year by 2018, equivalent to about £5,000 for every family in the country.

He also said the government should consider raising the retirement age more quickly to combat the effects of increased longevity. "Provisions for these potential costs should be made sooner rather than later."

More details at the Guardian link.