By Stephen Nakrosis

S&P Global Ratings on Friday said it was lowering its outlook on the U.K. to negative from stable, reflecting "what we view as rising risks to the U.K.'s fiscal position over the next two years."

S&P also said: "We estimate that the U.K.'s general government deficit will widen by an average 2.6% of GDP annually through 2025, while net general government debt will continue on an upward trajectory, in contrast to our previous expectation of it declining as a percentage of GDP from 2023."

S&P said the U.K. government plans to fund their stimulus "through additional borrowing with no offsetting measures on the revenue or expenditure side." As a result, S&P said it expects the general government deficit will rise to an average 5.5% of GDP annually over 2023-2025. "We forecast net general government debt will reach 97% of GDP by 2025," S&P said.

The agency said it expects the U.K. will be in a technical recession in coming quarters, adding its full-year growth forecast for the U.K. is at negative 0.5% in 2023, with 1.4% growth expected in 2024. S&P also said "we estimate annual average inflation at 9.5% this year before declining to 5.8% in 2023 and under 2% in 2024-2025.

S&P affirmed the U.K.'s 'AA/A-1+' unsolicited long- and short-term foreign and local currency sovereign ratings.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

September 30, 2022 18:22 ET (22:22 GMT)