Moody’s has warned the UK could lose its AAA status should the country fall into a triple-dip recession this winter.
The ratings firms’ comments come after the Bank of England’s decision to lower its growth forecast for 2013 to 1 per cent.
In its annual report, Moody’s says that the rating and the negative outlook on it will undergo a review in the first few months of 2013 following the country’s autumn statement.
Moody’s said: “The UK’s AAA government debt rating, and current negative outlook, continue to be underpinned by significant structural strengths, but cautions that the government’s efforts to achieve fiscal consolidation and reduce debt over the next five years are being hampered by weaker economic prospects as well as the risks posed by the euro area sovereign debt crisis.
“Although these challenges are currently reflected in the negative outlook on the UK’s sovereign rating, Moody’s will revisit the AAA rating and outlook in the first few months of 2013 to assess the impact of these challenges and of the government’s upcoming autumn Statement.”