S&P put financial markets in the northern hemisphere in a spin on Thursday night our time, when it changed the outlook on the 'AAA/A-1+' credit ratings assigned to the United Kingdom to negative from stable. The outlook revision was due to S&P's view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100 per cent of GDP and remain near that level in the medium term. The view is based on updated projections of general government deficits in 2009-2013. The projections reflect S&P's more cautious view of how quickly the erosion in the government's revenue base may be repaired, the extent to which the growth in government spending can be curtailed and consequently the pace at which historically high fiscal deficits are likely to narrow. The projections also incorporate updated estimates of the cumulative potential gross fiscal cost of government support to the banking system, which is now estimated to be in the range of £100 billion to £145 billion, or 7 per cent to 10 per cent of 2009 estimated GDP. S&P warned that the rating could be lowered if it concluded that, following the election, the next government's fiscal consolidation plans are unlikely to put the UK debt burden on a secure downward trajectory over the medium term. That said, it should be remembered that a negative outlook merely signals a one-third possibility of a rating being lowered within the next two years. Nevertheless, the pound sterling plunged from US$1.58 to almost US$1.55 on the news and UK CDS spreads widened by 8 bps to 80 bps. The main European iTraxx index finished the day 6 bps wider at 126 bps and the FTSE 100 ended the day down by 2.8 per cent.Moody's and Fitch were both quick to say that they were not intending to take any action on the credit ratings that they assign to the United Kingdom and Moody's went further saying that it is comfortable with its 'Aaa/Stable' on the United States, but warned that the rating is not "guaranteed forever" and that there are some longer term pressures on the rating.S&P also amended its outlook on the 'AAA' rated Network Rail Plc to negative, in line with its outlook change on the United Kingdom. Network Rail has $1.35 billion of bonds on issue in the domestic market, of which $850 million will mature in July next year and the remainder in November 2016.