Fitch Ratings once again warned the US today that a delay in raising the debt ceiling could put its 'triple-A' credit rating at risk.

While the agency believes that Congress will eventually act and that the risk of a US sovereign default remains "extremely low", it notes in today's report that "failure to raise the debt ceiling in a timely manner will prompt a formal review of the US sovereign rating."

Yet Fitch's warning goes beyond the current issue of the debt ceiling. "In the absence of an agreed and credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery and restoring confidence in the long-run sustainability of US public finances, the current Negative Outlook on the 'AAA' rating is likely to be resolved with a downgrade later this year even if another debt ceiling crisis is averted," the agency concludes.

JM

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