Standard & Poor's (S&P) has downgraded the UK's credit rating outlook to negative, which indicates the nation could run the risk of losing its top AAA rating in the near future.
S&P said it could lower the UK's rating if its economic performance weakens more than the organisation expects it to.
The Treasury stated that S&P endorsed the government's commitment to reducing the deficit.
A spokesperson commented: "The economy is on the right track and just this week it was again confirmed that jobs are being created, with over one million private sector new jobs in the last two years."
Fellow agencies Moody's and Fitch have both revised the UK to a negative outlook in the first half of 2012.
At 10:40 GMT, the pound was making gains on forex markets. Sterling advanced by 0.1 per cent against the dollar to £1 buying $1.613, while it appreciated by 0.1 per cent versus the euro to €1.234.
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