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Fitch revises United Kingdom's outlook to 'stable' on easing policy risks

Unemployment rate unchanged but signs point to cooling jobs market

(Reuters) - Global ratings agency Fitch revised the United Kingdom's sovereign credit outlook to "stable" from "negative" on Friday, citing easing economic policy risks, and affirmed its sovereign credit rating at "AA-".

The outlook revision comes after Britain's economy rebounded to growth in January from a shallow recession in the second half of 2023, driven by a resurgence in retail sales and housing.

"Fitch's cautious projections assume a balancing of policy priorities against reducing risks to the sustainability of public finances," the agency said.

Bank of England Governor Andrew Bailey on Thursday said Britain's economy is moving in the right direction with "further encouraging signs that inflation is coming down" but flagged that the central bank needed more certainty that price pressures were fully under control.

Peers S&P and Moody's also have a stable outlook on the United Kingdom.

(Reporting by Richard Rohan Francis in Bengaluru; Editing by Ravi Prakash Kumar)