STANDARD & POOR’S believes the UK’s economy is strong enough to warrant its triple-A rating, despite a slip into recession earlier this year.

As it affirmed its AAA/A-1+ rating, the agency claims the economy will recover in the second half of 2012 before starting to strengthen as policy continues to focus on closing the fiscal gap.

It also explained how the nation’s capacity to absorb shocks has improved.

“This stable outlook reflects our expectation that the UK government will implement the bulk of its fiscal consolidation programme and that the economy should recover in the remainder of 2012 and strengthen thereafter.”

According to S&P, the British pound sterling’s role as a global reserve currency gives the country its key credit strength – monetary flexibility.

Chancellor George Osborne welcomed yesterday’s statement, adding that it shows the world has confidence that the UK is dealing with the economic problems it faces.

“The deficit has fallen by a quarter; inflation has fallen by half; employment is rising, with British businesses creating over 800,000 new jobs; and the economy is re-balancing, with Britain now exporting more to the rest of the world than Europe,” he said. He also promised the Government would not relax in its resolve to deal with the current debt pile.

Related: Moody’s issues negative outlook warning for Germany>

Read: After the global financial crisis, why are rating agencies still trusted?>