BRIEF-Fitch Affirms The Uk At 'Aa-' Outlook Negative

BY Reuters | CORPORATE | 01/15/21 04:14 PM EST

Jan 15 (Reuters) -

* FITCH AFFIRMS THE UK AT 'AA-'; OUTLOOK NEGATIVE

* FITCH SAYS UK'S RATINGS BALANCE A HIGH INCOME, DIVERSIFIED AND ADVANCED ECONOMY AGAINST HIGH AND RISING PUBLIC SECTOR INDEBTEDNESS

* FITCH SAYS NEGATIVE OUTLOOK REFLECTS IMPACT OF CORONAVIRUS PANDEMIC ON UK ECONOMY & RESULTING MATERIAL DETERIORATION IN PUBLIC FINANCES

* FITCH SAYS STERLING'S RESERVE CURRENCY STATUS, DEEP CAPITAL MARKET AND STRONG GOVERNANCE INDICATORS SUPPORT UK'S RATINGS

* FITCH SAYS HAVE RAISED 2021 REAL GDP GROWTH FORECAST FOR UK TO 5.0% FROM 4.1% FOLLOWING ESTIMATED 10.3% CONTRACTION IN 2020

* FITCH SAYS UK'S PROGRESS WITH VACCINE ROLLOUT INDICATES A SUSTAINED RECOVERY COULD START FROM Q2 2021

* FITCH - EXPECT UK ECONOMY TO CONTRACT BY 3% QOQ IN 1Q21, BUT EXPECT STRONGER POST LOCKDOWN RECOVERY FROM 2Q21 THAN BEFORE DUE TO AVOIDANCE OF NO-DEAL DISRUPTION

* FITCH SAYS UK'S PROSPECTS FOR 2H21 AND 2022 HAVE IMPROVED OWING TO ROLLOUT OF COVID-19 VACCINES Source text for Eikon:

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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