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Osborne defiant on debt as UK loses AAA credit rating

Chancellor George Osborne has stated that the Government remains committed to its plan for economic recovery, despite the recent loss of the UK’s top AAA credit rating.

Following the news that ratings agency Moody’s had downgraded the rating from AAA to AA1, the Chancellor insisted that the decision would ‘redouble’ the Government’s resolve to deliver the economic recovery plan.

‘We have a stark reminder of the debt problems facing our country – and the clearest possible warning to anyone who thinks we can run away from dealing with those problems’, he commented.

Moody’s stated that the main driver underpinning its decision was ‘the increasing clarity that, despite considerable structural economic strengths, the UK’s economic growth will remain sluggish over the next few years due to the anticipated slow growth of the global economy and the drag on the UK economy’.

The organisation believes that the UK’s high debt burden will not be reversed until at least 2016.

Shadow Chancellor Ed Balls warned that the decision was ‘a humiliating blow to a Prime Minister and Chancellor who said keeping our AAA rating was the test of their economic and political credibility’.