London: UK Chancellor of the Exchequer George Osborne has vowed to stick to the government’s economic plans even after Britain lost its cherished AAA credit rating amid concern about weak growth and rising debt.
Moody’s, one of the biggest global credit ratings agencies downgraded Britain.
The agency said it had acted because of “continuing weakness in the UK''s medium-term growth outlook”, the risk that the government will fail to hit its targets for reducing the deficit and the UK''s “high and rising debt burden”.
Moody’s, however, predicted that on its current course, the UK would eventually regain its AAA status.
Any relaxation in the deficit-reduction could lead to another downgrade, it suggested.
According to the Telegraph, Osborne insisted that the Coalition will not change course on the economy, saying the downgrade made it all the more important to stick to attempts to cut Britain’s deficit.
He added that the country ‘will go on delivering the plan that has cut the deficit by a quarter, and given us record low interest rates and record numbers of jobs.’
Credit ratings assess a government’s ability to repay its loans, and can help determine the interest rate governments pay to borrow.
Britain had been rated AAA, the highest possible rating, but is now rated Aa1, one notch lower.