the series of large tax cuts and increased spending outlined by the uk government is fueling a confidence shock which could weaken debt affordability and the countrys credit profile according to global ratings agency moodys the tax cuts are credit negative and will lead to structurally greater deficit a weaker growth outlook and acute public spending pressure the agency said in a report published tuesday a sustained confidence shock arising from market concerns around the credibility of the governments fiscal strategy that resulted in structurally higher funding costs could also more permanently weaken the uks debt affordability moodys said uk chancellor of the exchequer kwasi kwarteng sparked a financial markets selloff by announcing the biggest tax cuts in a generation at a cost of around 45 billion pounds 483 billion a year in addition to new spending to freeze the rise in energy bills for households and businesses that is expected to cost gbp60 billion increased borrowing together with weakening economic growth will push already elevated government debt on an upward trajectory in the coming years moodys said the measures reflect the weakening predictability of fiscal policymaking that we have highlighted in recent years moreover uncertainty around the governments continuing compliance with its often revised fiscal rules weaken our assessment of policymakers forwardplanning ability and their willingness or ability to deliver on the targets they set the agency said in the context of a sharp depreciation of the british pound and the spike in government bond yields moodys said maintaining foreigninvestor confidence may become increasingly important a sustained confidence shock accompanied by concerns around the governments commitment to fiscal prudence andor the central banks ability to contain inflation could more permanently weaken debt affordability and the uks credit profile it said