LONDON (Reuters) -Scotland has been awarded an AA government debt rating from leading credit rating agency S&P Global, but the firm said that would likely drop if there was a renewed drive for independence from the rest of the United Kingdom.
The announcement on Wednesday is the first time the Scottish government has been awarded its own rating by S&P. The AA grade matches that of the broader UK rating, now under pressure due to a rising debt-to-GDP ratio of nearly 100%.
S&P cited Scotland’s supportive institutional framework, a modest 10% debt-to-operating revenue ratio and the “substantial transfers” it gets from the UK government that cover most of its spending as the key reasons for the AA grade.
However, it stressed the rating was likely to be cut if the country “took material steps toward independence from the UK” although it did not say by how much.
That looks unlikely for now after last year’s UK parliamentary elections saw the main advocate of independence, the Scottish National Party, post its worst showing since 2010.
(Reporting by Marc Jones; Editing by Jamie Freed)
