Britain has suffered its first ever sovereign ratings downgrade from a major agency, after Moody’s stripped the country of its top-notch triple-A rating.
Moody’s cut Britain’s rating by one notch to Aa1 from Aaa, with a stable outlook, blaming weak prospects for Britain’s economy over the coming years. Austerity has been the watch word for Chancellor of the Exchequer George Osborne’s fiscal policy since his Conservative-led coalition came to power in 2010. In the election, Osborne vowed to defend Britain’s triple-A rating, which keeps down borrowing costs. But weak growth has pushed the government’s goal of largely eliminating the budget deficit by 2015, at least two years off track. Moody’s said that Britain’s growth is expected to be sluggish due to a combination of weaker global economic activity and a drag "from the ongoing domestic public and private-sector de-leveraging process."
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