The UK has had it’s credit rating downgraded one notch from AAA to AA1 by the credit rating agency Moody’s. Out of all the major economies this leaves only Canada and Germany with their top credit ratings intact.

The downgrade is a major blow for the government who have been tackling the UKs massive debt mountain, seeking to end the UK budget deficit by 2016.

Moody’s made the downgrade due to the continued poor economic growth, pointing out, “continuing weakness in the UK’s medium-term growth outlook, with a period of sluggish growth which [it] now expects will extend into the second half of the decade”.

UK Chancellor George Osborne has pledged to continue on his course of deficit reduction, calling Moody’s decision 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”.

“Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it.”

Last year all three major credit rating agencies placed the UK on negative outlook.

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