Britain's AAA Credit Rating Lost
George Osborne is coming under pressure over what Labour calls his "catastrophic economic policy failure" after the UK lost its top-grade AAA credit rating.
International agency Moody's downgraded it by one notch to AA1, citing slow growth and a rising debt burden.
The Chancellor said it was a "stark reminder" of the country's debt problems, but said the coalition was determined to stick by its plan for economic recovery.
In the last election, Ms Osborne made safeguarding Britain's top credit rating one of his key pledges.
And he has used maintaining the rating for government bonds as one of the main arguments for the Government's austerity programme.
The downgrade is a major blow for Mr Osborne, who has been coming under increasing pressure to take action to stimulate the economy.
He said: "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.
"We are not going to run away from our problems, we are going to overcome them."
Labour's shadow chancellor Ed Balls told Sky News: "They (the Government) are paying the price for an absolute catastrophic failure of economic policy and everybody can see that now pretty much other than the chancellor and the prime minister.....Read more