Moody’s downgrade depresses pound

<p>Moody’s has downgraded the UK’s top credit rating, sending the pound lower.</p>

The pound has fallen lower in currency trading this morning (February 25th), as the markets react to the decision to revise down the UK's credit rating.

Moody's downgraded the country from the top AAA status on Friday evening – action that had been threatened for some time.

The pound fell to a 16-month low in trading with the euro after the decision was taken, while sterling plunged to a 31-month nadir versus the dollar.

This is the first time Moody's has cut the UK's top AAA rating since the 1970s, but the government has played down the news and the chancellor has denied that this means he needs to change his policies to bring about the economic recovery.

George Osborne commented: "It's going to take several more years of this in order to get back not just our credit rating but to get back to sensible economic growth."

At 08:50 GMT, the pound was flat versus the dollar, with £1 buying $1.515, while it slipped by 0.3 per cent against the euro to €1.145.

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