"The ambitious fiscal consolidation outlined today by the UK chancellor is a further step towards demonstrating the UK's commitment to fiscal prudence after the UK's policy credibility weakened following September's fiscal statement," Moody's Vice President - Senior Credit Officer Evan Wohlmann said.

"However, the polarised domestic political environment and heightened policy unpredictability may undermine efforts to deliver on fiscal consolidation, particularly in light of strong social and political pressures on government spending."

(Reporting by William Schomberg, writing by Sarah Young)