The UK's coveted triple A rating is stable, according to credit rating agency Moody's, meaning the UK is seen as one of the least risky countries, avoiding higher interest rates on its national debt.
Moody's Analyst Kenneth Orchard criticised the previous Labour government for an "explosion in deficit and debt metrics over the past three years."
But Moody's said that the stable outlook for the UK's rating was largely driven by the Coalition Government's "commitment to stabilise and eventually reverse the deterioration in its financial strength."
The Coalition Government was also praised for setting up the Office of Budget Responsibility to provide independent assessments of the public finances.
Moody's said the Labour's election promise to halve the deficit over four years was "insufficient", although leadership contender Ed Balls has said he would have preferred an even weaker approach.
A Treasury spokesman said "This supports the Government's approach to cutting the deficit. Moody's say that their stable outlook for the UK's AAA credit rating is driven by the new Government's action to cut the deficit, and rate the Government's fiscal consolidation plan as 'strong'."