S&P threatens to cut UK's AAA rating

Standard & Poor's has threatened to cut the UK's AAA rating just a week after George Osborne's Autumn statement.

The ratings agency has followed Fitch and Moody's by placing the UK on a negative outlook and warned the nation would lose its top rating if 'fiscal performance weakens beyond our current expectations'.

The news will be a blow to chancellor Osborne, who outlined fresh measures to reduce the UK's debt position in his statement. The defecit is expected to come in at 7% this year, significantly below the 11% of 2011.

In a statement accompanying its move S&P said. 'The outlook revision reflects our view that we could lower the ratings on the UK within the next two years if fiscal performance weakens beyond our current expectations. We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation.

It added: 'We expect economic growth to rise slowly in the medium term, with net general government debt as a percentage of GDP [annual economic output] continuing to rise in 2015, instead of stabilising in 2014 as previously expected.'