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| Moody's rating agency places UK on negative outlook | Moody's rating agency places UK on negative outlook |
| (40 minutes later) | |
| US credit ratings agency Moody's has put the UK on negative outlook, meaning it thinks there is more chance the economy may lose its triple A status. | US credit ratings agency Moody's has put the UK on negative outlook, meaning it thinks there is more chance the economy may lose its triple A status. |
| France and Austria, who also share a top triple A rating, have been similarly graded. Italy, Spain and Portugal's ratings have been lowered. | France and Austria, who also share a top triple A rating, have been similarly graded. Italy, Spain and Portugal's ratings have been lowered. |
| Moody's blamed the eurozone crisis for the adjustments. | Moody's blamed the eurozone crisis for the adjustments. |
| The Chancellor remains committed to his policy of austerity whilst the opposition warns this could backfire. | The Chancellor remains committed to his policy of austerity whilst the opposition warns this could backfire. |
| The negative outlook for the UK means Moody's think there is a 30% chance of a downgrade within 18 months. | The negative outlook for the UK means Moody's think there is a 30% chance of a downgrade within 18 months. |
| BBC economics editor Stephanie Flanders said there was no suggestion that the agency would prefer the UK government to change its economic policy of austerity. | BBC economics editor Stephanie Flanders said there was no suggestion that the agency would prefer the UK government to change its economic policy of austerity. |
| In a statement, Moody's said that it had "adjusted the sovereign debt ratings of selected EU countries to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis." | In a statement, Moody's said that it had "adjusted the sovereign debt ratings of selected EU countries to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis." |
| Responding to the ratings decision by Moody's the Chancellor of the Exchequer George Osborne said: "This is proof that, in the current global situation, Britain cannot waver from dealing with its debts." | Responding to the ratings decision by Moody's the Chancellor of the Exchequer George Osborne said: "This is proof that, in the current global situation, Britain cannot waver from dealing with its debts." |
| Treasury sources have sought to play down the significance of the ratings agency Moody's decision to place the UK's Triple A rating at risk. | Treasury sources have sought to play down the significance of the ratings agency Moody's decision to place the UK's Triple A rating at risk. |
| The source said the decision was not "entirely unexpected" given the difficult economic situation facing the UK. Much of the reason for the potential downgrade was a consequence of the difficulties in the eurozone. | |
| The source said that Moody's made clear any "discretionary fiscal loosening" would make a downgrade more likely and that this underscored the need for the Government out stick to its deficit reduction strategy. | The source said that Moody's made clear any "discretionary fiscal loosening" would make a downgrade more likely and that this underscored the need for the Government out stick to its deficit reduction strategy. |
| Mr Osborne added: "Moody's are explicit that it is only the Government's 'necessary fiscal consolidation' that is stopping an immediate downgrade, which would happen if there were any 'reduced political commitment to fiscal consolidation'. | Mr Osborne added: "Moody's are explicit that it is only the Government's 'necessary fiscal consolidation' that is stopping an immediate downgrade, which would happen if there were any 'reduced political commitment to fiscal consolidation'. |
| "This is a reality check for anyone who thinks Britain can duck confronting its debts." | "This is a reality check for anyone who thinks Britain can duck confronting its debts." |
| The coalition government has come under increasing pressure to ease up on its austerity measures in the face of growing unemployment and stalled economic growth. | The coalition government has come under increasing pressure to ease up on its austerity measures in the face of growing unemployment and stalled economic growth. |
| Labour's shadow chancellor, Ed Balls, described the change as a "significant warning". | Labour's shadow chancellor, Ed Balls, described the change as a "significant warning". |
| He said: "We have consistently argued that the Chancellor's gamble - raising taxes and cutting spending too far and too fast...would backfire." | He said: "We have consistently argued that the Chancellor's gamble - raising taxes and cutting spending too far and too fast...would backfire." |
| "Reality check" | "Reality check" |
| BBC economics editor Stephanie Flanders said that the negative outlook for the UK is not the same as negative watch - which means a more-than-50% chance of a downgrade. | BBC economics editor Stephanie Flanders said that the negative outlook for the UK is not the same as negative watch - which means a more-than-50% chance of a downgrade. |
| "There is no suggestion, in the agency's statement, that it would like to see the UK ease up on austerity," our correspondent added. | "There is no suggestion, in the agency's statement, that it would like to see the UK ease up on austerity," our correspondent added. |
| "Quite the opposite. But the opposition will be quick to note that preserving Britain's top rating has long been a central plank of George Osborne's case for deeper cuts. | "Quite the opposite. But the opposition will be quick to note that preserving Britain's top rating has long been a central plank of George Osborne's case for deeper cuts. |
| "For this ratings agency at least, Britain's triple A is at greater risk now than at any time since Mr Osborne's first budget." | "For this ratings agency at least, Britain's triple A is at greater risk now than at any time since Mr Osborne's first budget." |