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article imageUK loses top AAA credit rating for first time in 35 years

By Kev Hedges     Feb 22, 2013 in Business
Britain has lost its cherished AAA credit rating after Moody's, the world's largest global credit rating agency, downgraded the UK to Aa1.
Moody's said "continuing weakness in the UK's medium-term growth outlook” and the coalition government's debt reduction program were just two factors which influenced the agency to downgrade. But Chancellor of the Exchequer, George Osbourne has refused to alter course on the economy and in the meantime the pound has fallen heavily again against the dollar and the euro. Late on Friday evening the pound was worth just $1.515, which compares poorly to $1.64 it was as recently as mid-December 2012.
The measures are likely to strengthen any resolve to introduce further austerity measures and reduce the debt burden after Moody's said the AAA status could be regained if Britain stuck to a deficit reduction program, reports the Telegraph UK.
Moody's has cited weaknesses in the medium term outlook for growth in the UK economy. It believes the weakness may extend for a number of years before a firm recovery can take place, reports Reuters.
The UK economy has already suffered a double dip recession since the world economic slowdown began in late 2007, and now its latest growth figures of minus 0.3%, will push the nation into a triple dipper if the next quarter's growth figures show negative again. The next growth figures are due in April.
More about moody's, Moody's rating agency, Britain, Credit crunch, Economy
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