Britain’s credit rating downgraded from AAA to Aa1 (Feb 2013)

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Source: The Telegraph – Britain’s credit rating downgraded from AAA to Aa1

Notable excerpts:

Moody’s announced on Friday night that it had cut the Government’s bond rating one notch from ‘Aaa’ – the highest possible level – to ‘Aa1’.

The move is a significant setback for Chancellor George Osborne, who has faced criticism that his strategy for dealing with UK’s huge debt burden is failing to deliver.

Moody’s pointed to “continuing weakness in the UK’s medium-term growth outlook, with a period of sluggish growth which [it] now expects will extend into the second half of the decade”.

The credit ratings agency also noted that the Government’s debt reduction programme faced significant “challenges” and that the UK’s huge debts are unlikely to “reverse before 2016”.

Mr Osborne responded to the downgrade by insisting he would not change course on the Government’s austerity programme.

He called Moody’s decision a “stark reminder of the debt problems facing our country – and the clearest possible warning to anyone who thinks we can run away from dealing with those problems”.

All three major credit agencies last year put the UK on “negative outlook“, meaning they could downgrade its rating if performance deteriorates.

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