Bulletin: U.K. Government's Welfare Cut Reversal Underscores Formidable Fiscal Consolidation Challenge

This report does not constitute a rating action. LONDON (S&P Global Ratings) July 3, 2025-- S&P Global Ratings said today that the United Kingdom (U.K.; unsolicited rating: AA/Stable/A-1+) government's decision to cancel the planned £5 billion (0.2% of 2025 GDP) cuts to welfare spending underscores the formidable political challenge to keep public-sector expenditure in check in the face of significant spending demands. We consider the U.K.'s fiscal position as vulnerable and one of the key constraints on our 'AA' sovereign rating. We expect that U.K. budgetary consolidation will remain a slow process. Ahead of the parliamentary vote on the welfare reform bill on July 2, Prime Minister Keir Starmer's Labour government was forced to backtrack on much of its planned

...This unsolicited rating(s) was initiated by a party other than the Issuer (as defined in S&P Global Ratings' policies). It may be based solely on publicly available information and may or may not involve the participation of the Issuer and/or access to the Issuer's internal documents and/or access to management. S&P Global Ratings has used information from sources believed to be reliable based on standards established in our policies and procedures, but does not guarantee the accuracy, adequacy, or completeness of any information used....

Bulletin