Photograph by William Murphy
The UK has lost its AAA credit rating, with Moody’s cutting the rating to AA1. This is the first time the UK has had its rating downgraded since 1978, and as a result of expected “sluggish” growth over the coming years.
They said that the government’s debt reduction programme faced significant “challenges”, with Chancellor George Osborne commenting the the downgrade was “a stark reminder of the debt problems facing our country”, but he remained resolute that the government should push forward with its austerity measures.
On BBC Radio 4’s Today programme Labour Shadow Chancellor Ed Balls said that the downgrade was a “humiliating blow” to the government’s economic credibility, and noting that their plan of austerity had not worked as “there has been no growth now for two years, [and]our deficit is getting bigger”.
A downgraded credit rating could mean higher interest rates for future government borrowing, but Osborne has said that the UK is still able to borrow money “very cheaply with very low interest rates” from investors all around the world.
