Moody's rating agency places UK on negative outlook

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. 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 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. 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 waiver from dealing with its debts." Continue reading the main story Analysis Norman Smith Chief political correspondent, BBC News Channel 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 tech 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. 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." 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". 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" 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. "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."