A senior Moody's analyst spoke on Wednesday stating Britain is at risk of losing its AAA credit rating.
If economic growth continues to slow and the government fails to maintain the pace of public spending cuts, Britain will lose its AAA credit rating.
Sarah Carlson, vice-president and senior analyst at the ratings agency said, Although the weaker economic growth prospects in 2011 and 2012 do not directly cast doubt on the UK's sovereign rating level, we believe that slower growth combined with weaker than expected fiscal consolidation efforts could cause the UK's debt metrics to deteriorate to a point that would be inconsistent with a AAA rating.
The British Pound hit a one month low versus the EURO, .8977, however is trading now near the daily lows at .8905. The GBP/USD is down 76 pips, -.46%.
The rating agency said its outlook for Britain was stable.
Tomorrow is the BOE interest rate meeting, 7AM EST, where they are expected to leave rates unchanged at .5%.
Even though inflation fears have not subsided, the monetary policy committee MPC has not raised interest rates as the UK economic recovery remains fragile.
Weaker retail sales data, housing property prices falling, food price inflation of 4.9%, are all adding to the UK's economic despair.