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Osborne 'humiliated' by rating cut
George Osborne said the loss of the UK's gold-plated status did not mean the Government should change course
The Chancellor George Osborne has been accused of having suffered a "humiliating blow" after Britain was stripped of its AAA credit rating.
Ed Balls, shadow chancellor, said the announcement by Moody's downgrading the country's AAA credit rating was a "very, very bad moment" for Mr Osborne following the Chancellor's assertion that losing this status would be a humiliating blow.
"The Chancellor said this would be a humiliating blow and the first test of his policy was to avoid it, so clearly for him politically, it is a very, very bad moment," he told BBC Breakfast.
"I think economically, the credit rating decision itself makes no difference at all.
"What the credit rating agencies are doing though is reflecting the reality and the reality is an economy which is not growing, a deficit which is getting bigger, families in real stress and a Government which is ploughing on regardless with a plan which is not working - saying 'the medicine is not working, let's increase the dose of the medicine' that is completely crazy economics."
The attack by the shadow chancellor came after Mr Osborne said the coalition was determined to stick by its plan for economic recovery after the rating was lowered by a notch to AA1.
Moody's warned that "subdued" growth prospects and a "high and rising debt burden" were weighing on the economy.
Mr Osborne said the loss of the gold-plated status did not mean the Government should change course.
"We have a stark reminder of the debt problems facing our country - and the clearest possible warning to anyone who thinks we can run away from dealing with those problems," he said.
"Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it. We will go on delivering the plan that has cut the deficit by a quarter, and given us record low interest rates and record numbers of jobs."