S&P confirms top AAA rating for UK

Giving its backing to the chancellor's deficit reduction plans S&P said Britain's "wealthy and open economy" improved its "capacity to absorb shocks".

According to the ratings agency, the outlook for the UK's AAA rating was "stable", placing it at odds with fellow agencies Moody's and Fitch, which had both put the country's top tier rating on a "negative outlook", and increased risk of an outright downgrade.

The rating agency confirming its top AAA long-term credit rating for Britain in a statement, "Standard & Poor's Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term unsolicited sovereign credit ratings on the United Kingdom. The outlook remains stable."

It added the ratings reflected Britain's "wealthy and diversified economy, fiscal and monetary policy flexibility, and adaptable product and labour markets."

S&P added that it believed, "the UK government maintains a strong commitment to implementing its fiscal mandate, and has the ability and willingness to respond rapidly to economic challenges."

According to George Osborne, S&P's decision was a reminder that Britain would end up in an "an economic catastrophe" in the absence of austerity.

He added, Britain was weathering the international debt storms due to the policies that had been adopted and stuck with  in tough times.