14 Oct 2011

Spain downgraded by credit agency

Standard & Poor’s cuts Spain’s credit rating because of an unpredictable financial climate and slow growth.

Spain downgraded by rating agency (getty)

Unemployment was a major factor in the decision, the agency added, as it would take longer for the economy to grow.

S&P also also cited high levels of debt as a challenge for Spain’s private sector.

On Thursday, Fitch also downgraded UK banks Lloyds and RBS, as well as Switzerland’s UBS.

“[We] believe the government could miss its fiscal target due to budgetary slippages at the local and regional government levels and in social security, despite a better than expected central government deficit,” said S&P.

The ratings agency cut Spain’s rating down from double A, to double A minus.

The move comes as G20 finance ministers meet in Paris today to discuss the crisis in the eurozone. Each member state has been asked to propose measures that would help to boost growth.