Ratings agency Standard and Poor's is likely to make a decision on its negative outlook on the UK shortly after the UK budget on June 22, the agency's head of sovereign ratings said on Tuesday.
The ratings agency wants to see if British fiscal strategies are credible before deciding on any action on the sovereign's AAA rating, David Beers told Reuters and Reuters Insider television.
Asked if a change on even the United States' AAA rating was conceivable, Beers said: "Yes".
On the UK, he said: "I think we can make a judgement after the budget. We may have to wait longer, we will lead the market through that, but I think that's appropriate. We'll see what the Chancellor tells us." Fellow rating agencies Fitch and Moody's also assign a triple-A rating to the UK, but S&P is the only one to have the sovereign on a negative outlook.
S&P cut its outlook on the UK a year ago, signalling that it might downgrade the sovereign due to the country's rising debt burden.
A downgrade would increase borrowing costs for Britain and in turn for UK companies.
Fitch said on Tuesday that the UK needed more ambitious deficit-reducing plans. [ID:nLDE6570YW]
Britain's new coalition-led government has already announced 6 billion pounds ($9.3 billion) of spending cuts this year and will unveil further measures in an emergency budget on June 22.
Asked in a wide-ranging interview on sovereign ratings whether he was concerned about recent comments from French Budget Minister Francois Baroin that the objective of keeping France's AAA rating was "a stretch", Beers said those comments were understandable.
"We understand why policymakers are concerned because the fiscal performance of France has diverged from Germany in particular in the last couple of years."
Beers also said he was watching developments in deficit-reduction in the United States.
"We're watching and waiting to see in terms of the political debate in Washington, whether there's likely to be over the next couple of years a change in tone and in policy to turn the deficit around."
S&P rates the United States at triple-A with stable outlook.
S&P downgraded Greek debt to junk status towards the end of April and also cut ratings for Portugal and Spain in a series of swift moves that pressured the euro and drew ire from European officials who had just agreed to an emergency aid plan for debt-stricken Greece.
Euro zone sovereigns have faced additional pressure because they are unable to print money to repay outstanding debts.
"One important difference (between the U.S. and the euro zone) is that the U.S. is a single sovereign with a single central bank," Beers said.
"There is a higher correlation between the creditworthiness of the U.S. and the Federal Reserve."
