LONDON British Prime Minister David Cameron said on Wednesday a decision by Moody's to cut Britain's top-notch triple A credit rating underlined the need to step up efforts to reduce the country's deficit.
"I'm the one saying this credit rating does matter, and it demonstrates that we have to go further and faster on reducing the deficit," Cameron told parliament.
Moody's dealt Britain its first sovereign rating downgrade on Friday, saying the $2.5 trillion (1.65 trillion pounds) economy faced years of sluggish growth and that debt would continue to rise until 2016.
The opposition Labour party has said the downgrade proves Cameron's deficit reduction strategy isn't working, but the government has insisted it won't flinch from its austerity drive. Cameron has also come under pressure from his own ruling Conservative party to make deeper and faster cuts in Britain's welfare budget to try to win the prized AAA rating back.
Ahead of a March 20 budget, investors are looking for any signs the government is considering ratcheting up its austerity push. But an official spokesman for Cameron said the prime minister had been referring to existing rather than new policy.
"The prime minister was setting out the government's policies as they are," the spokesman said. "The period of fiscal consolidation has been extended and that's what the PM was referring to."
(Reporting by Andrew Osborn and Mohammed Abbas; Editing by William Schomberg)