LONDON: The pound fell sharply yesterday after ratings agency Fitch warned that Britain was “potentially most at risk” of losing its triple-A sovereign debt rating. Britain’s ballooning budget deficit has caused similar warnings from other ratings agencies and Fitch said it expected the British government to soon articulate stronger plans to reduce the deficit. But nervy foreign exchange markets did not like the reminder of Britain’s deficit, which is heading for a record of 12.5 per cent of national income in the current fiscal year. Sterling, having hit a three-month high against the dollar on Monday, fell back to around $1.66 against the dollar, although it later recovered somewhat after Gordon Brown stressed that if the Labour govenment won the general election, it would halve the deficit within four years. Brown said at his monthly press conference: “We have assured people that, as a result of our deficit reduction plan that we announced in our budget in April, we are taking the necessary action to cut our deficit by half ... probably ahead of other countries.” “I think the ratings agencies will take into account that these are world issues that have got to be dealt with, not just by one country, but many countries.” The pound also fell back against the euro to close to EUR1.11. “The Fitch news was a reminder of the longer-term issues facing the UK,” said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt. Chancellor Alistair Darling will soon present new economic and budget forecasts in the pre-budget report, widely expected on either December 2 or 9. He is likely to give more details about plans to reduce the deficit, since only about half of the measures needed were spelled out in last March’s budget.