By Marc Jones

LONDON (Reuters) – Moody’s top European analyst has flagged Oct. 21 as the next crucial date for Britain’s credit rating following the firm’s negative assessment this week of the government’s new debt-fuelled spending plans.

Rating firms set out when they intend to review European governments’ creditworthiness before the start of each year and by coincidence both Moody’s and S&P Global have scheduled Oct. 21 as their next UK dates.

Moody’s described the UK’s plans for sweeping tax cuts this week as “negative” for Britain’s creditworthiness but stopped short of actually changing the rating’s ‘outlook’ to negative as it did with Italy recently, a move that was also taken on the scheduled calendar date.

In our normal course of business, that (Oct. 21) would be the point at which we would normally expect to update the market,” Moody’s Chief EMEA Credit Officer Colin Ellis told Reuters when asked whether it had considered cutting the UK’s Aa3 rating this week.

“The decision that we will have to take and the discussion we will have… is whether these actions are negative enough to warrant a rating action. And what form, if any, that rating action should take.”

Moody’s already rates the UK one rung lower than France despite a lower debt-to-GDP level. Its UK score is also lower than S&P’s equivalent AA although it is in line with Fitch’s AA-.

It estimates 72 billion pounds of additional spending in the UK’s new plans will keep the budget deficit above 6% of gross domestic product (GDP) over the next two years and lift the debt-to-GDP ratio to 104% from 100% by 2026.

Since it put out that assessment out there has been more drama though with the Bank of England having to intervene in UK bond markets to arrest a sharp rise in longer-term borrowing costs that was causing issues for some pension funds.

That move is also likely to be part next month’s rating discussions, Ellis added. While it is positive that the UK has the BoE to step in, it also raises questions about why it had to do it in the first place.

“Having a lender of last resort, that recognises that (issue) and does it early is a really good thing. That’s a sign of an institution playing its role,” Ellis said.

“Obviously, there’s a counter argument, which is wouldn’t have been lovely if they never had to respond to this event in the first place”.

(Reporting by Marc Jones; Editing by Toby Chopra)