Fitch maintains UK rating
Fitch Ratings on Friday maintained Britain’s “AAA” credit rating with a negative outlook, warning that weak economic growth and a rising debt level was increasing the likelihood of a downgrade. Fitch said “weaker than expected growth and fiscal outturns this year have increased pressure on the UK’s ‘AAA’ rating.” With Fitch estimating that Britain’s debt in 2015-2016 may approach 100 percent of GDP, the limit for a top “AAA” rating, “the likelihood of a downgrade has therefore increased.” It said the negative outlook reflects Britain’s “very limited fiscal space, at the ‘AAA’ level, to absorb further adverse economic shocks in light of the UK’s elevated debt levels and uncertain growth outlook.” Fitch had put Britain’s rating on negative outlook, or subject to downgrade, in March.
Lawmaker urges data laws
An EU lawmaker called for tighter control of online social networks under a data protection regulation now being debated after some Facebook users said their personal messages appeared on their public profiles. EU regulators are in the midst of writing new legislation that could give Internet users greater control over how their personal data is used by big technology companies. One part of the regulation requires companies to get permission before “processing” people’s personal data, although exactly how and when such consent would be needed is still subject to debate. On Tuesday the French data protection regulator asked to meet Facebook after thousands of users complained private messages dating back to 2007 were visible on their Facebook timelines.
IMF approves sales profits
The IMF on Friday approved US$2.7 billion in gold sales profits to boost financing to low-income countries. The IMF executive board earmarked the money for the global lender’s concessional lending program, the Poverty Reduction and Growth Trust. The distribution of the windfall profits will occur “only when members have given satisfactory assurances that an amount equivalent to at least 90 percent of the distribution will be made available to the PRGT,” the institution said in a statement. “This is a major step toward putting our important concessional lending operations for low-income members on a sustainable footing,” IMF managing director Christine Lagarde said.
President unveils levies
Socialist President Francois Hollande unveiled higher levies on business and a 75 percent tax for the super-rich on Friday in a budget for next year aimed at showing France has the fiscal rigor to remain at the core of the euro zone. The package aims to recoup 30 billion euros (US$39 billion) for the public purse with a goal of narrowing the deficit to 3 percent of national output next year from 4.5 percent this year — France’s toughest single belt-tightening in 30 years. However, the budget dismayed business and pro-reform lobbyists by preferring tax hikes and a simple freeze of France’s high public spending to attacking ministerial budgets as Spain did this week in its battle to avoid an international bailout.