THE GUARDIAN: Negative outlook for Austria, France and the UK. Italy, Malta, Portugal, Spain, Slovakia and Slovenia have ratings cut
Britain's AAA credit rating was thrown into doubt after the ratings agency Moody's said the ongoing euro crisis and a credit squeeze on the banking sector put the country at a higher risk of defaulting on its debts.
Moody's said that countries including the UK, France and Italy would be put on negative watch after citing "uncertainty" over Europe's handling of its ongoing debt crisis.
The possible loss of the UK's much coveted triple-A status will be a bitter blow for the chancellor George Osborne who has staked his reputation on distancing Britain from the ailing eurozone.
Riots and looting on the streets of Athens highlighted the confusion at the highest levels of the European political establishment over how to deal with the mounting debts faced by Greece. Brussels rejected handing over €130bn without further commitments from the Athens parliament and proposals for further cuts to be implemented this year.
Osborne was expected to stick to his aim of reducing Britain's "structural deficit" by 2017 when he stands up in parliament next month to deliver his third budget since the coalition took power in 2010.
But the verdict of Moody's will add to the pressure from opposition MPs and many economists on him to change course. Moody's said it was concerned that he would miss previous targets to cut the deficit by 2015.
The AAA rating is the highest awarded to a country and allows it to borrow at the lowest interest rates. » | Dominic Rushe and Phillip Inman | Monday, February 13, 2012
THE GUARDIAN: UK austerity v US stimulus: divide deepens as eurozone cuts continue: The emphasis in Europe is on fiscal rigour and slashed budgets, but there is a growing awareness such policies are not working » | Phillip Inman, Ian Traynor in Brussels and Dominic Rushe in New York | Tuesday, February 14, 2012
