LONDON/WASHINGTON: Ratings agency Standard & Poor’s affirmed the United Kingdom’s sovereign debt rating at ‘AA’ on Friday, saying the government’s pandemic response efforts helped limit the hit to its economy. The rating action comes a day after Britain’s finance minister offered more cash to prop up businesses reeling from the coronavirus crisis, as new curbs to tackle a resurgence in cases threaten a nascent economic recovery. The UK government and the Bank of England have demonstrated significant fiscal and monetary flexibility in their response to the pandemic, said S&P in a statement. The agency maintained its outlook at “stable” on Britain’s sovereign debt. S&P upgrades

Meanwhile, S&P Global Ratings on Friday held the grade on Italy’s government debt steady at BBB but upgraded the outlook to stable from negative, noting improved prospects to restart growth amid the pandemic. “The COVID-19 pandemic has hit Italy’s economy hard; under our projections, GDP will not return to 2019 levels until 2023,” the agency said in a statement.

S&P estimates the Italian economy will contract by about 9 percent this year, before recovering by 6.4 percent next year. However, low interest rates and expanded measures by the European Central Bank (ECB) could provide a huge injection to the Italian economy. “In our view, despite macroeconomic uncertainties, these steps provide Italian authorities an opportunity to restart economic growth and to reverse the deterioration of its budgetary performance,” the statement said.

S&P Global Ratings downgraded the outlook on Azerbaijan’s debt to negative, even while holding the credit rating stable at BB+ amid the rising risks from the conflicted ignited in September with neighboring Armenia. “The military confrontation could exacerbate Azerbaijan’s economic, external, and fiscal vulnerabilities at a time when the economy has been weakened by COVID-19 and the collapse in oil prices,” S&P said in a statement.

The conflict will weigh on the nation’s economy and finances as it “may take quite some time to resolve.” Hundreds have already been killed in the latest flare-up of fighting over Karabakh, a region of Azerbaijan long controlled by ethnic Armenian separatists. Efforts by world governments to broker a peace have so far failed. – Agencies