UK's AAA downgrade: why the ratings agencies are best ignored

'There is a lesson here. Sometimes the ratings agencies are best ignored. They played a pernicious role in the run up to the financial crisis, assigning AAA ratings to flawed debt instruments linked to overheated housing markets. The damage to bank capital ratios when these investments turned sour is what created the credit crunch,' Greetham added.

He continued: 'Now, with economies facing sustained consumer deleveraging pressure as a result, the same ratings agencies have advised governments to add to the pain by implementing aggressive austerity plans when their economies need as much support as the markets will let them give.'