NEW YORK, Feb. 22 (Xinhua) -- Moody's Investors Service Friday downgraded government bond ratings of the United Kingdom by one notch to Aa1 from Aaa with stable outlook.
Moody's move was based on the expectation that the continuing weakness in the UK's medium-term growth outlook would extend to the second half of the decade.
In addition, subdued medium-term growth prospects posed challenges to the government's fiscal consolidation program.
Moreover, Moody's said in a statement that the consequence of the country's high and rising debt burden is unlikely to reverse before 2016.
Moody's said downward pressure on the rating could arise if government policies were unable to stabilize and begin to ease the UK's debt burden during the fiscal consolidation program.
Moody's could also downgrade the UK's government debt rating further if additional deterioration in the country's economic prospects or reduced political commitment to fiscal consolidation occurred.
In the mean time, Moody's said the UK's creditworthiness remains extremely high, because of the country's significant credit strengths including a highly competitive, well-diversified economy, a strong track record of fiscal consolidation, and a favorable debt structure.