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Eurozone crisis live: UK credit rating under threat amid Moody’s downgrade blitz

No sign of Valentine’s Day affection as rating agency Moody’s warns that Europe’s debt crisis is threatening the credit worthiness of the region

7.56am: Ed Balls, the shadow chancellor, hit the airwaves as dawn broke over the UK, insisting that George Osborne should change course.

Balls told the Radio 4 Today Programme that the Treasury must make growth a bigger priority. Otherwise, we risk sliding ino a second Great Depression, with deflation and mass unemployment.

Here’s the key quote from Balls:

Even the rating agencies now recognise that austerity alone is self-defeating. The world is making 1930′s mistakes – and rating agencies are partly responsible.

Today is the first evidence that even the rating agencies are waking up to this.

Osborne will get his chance to rebut Balls in a few minutes – he’s due on the Today programme at 8.10am.

7.54am: Moody’s warning is the headline news on a busy day for economic data – including the latest UK inflation reading. There are also some interesting government bond sales scheduled.

Here’s today’s agenda:

UK inflation (CPI and RPI) – 9.30am GMT
Portuguese GDP for Q4 2011 10am GMT / 11am CET
German ZEW economic sentiment survey -10am GMT / 11am CET
Eurozone industrial production – 10am GMT / 11am CET
US Treasury secretary Tim Geithner testifies to the Senate Finance Committee – 3pm GMT / 10am EST

Bond auctions:
• Italy auctioning €6bn of debt,
• Greece auctioning three-month bonds
• Spain auctioning 12 and 18-month bonds

7.49am: Moody’s said its rating changes were based on each country’s susceptibility to the “growing financial and economic risks” created by the eurozone debt crisis.

The main drivers were:

• The uncertainty over (i) the euro area’s prospects for institutional reform of its fiscal and economic framework and (ii) the resources that will be made available to deal with the crisis.

• Europe’s increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness.

• impact that Moody’s believes these factors will continue to have on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.

You can see the full statement here.

7.40am: Good morning, and welcome to our rolling coverage of the European financial crisis.

Credit rating agency Moody’s has cut its rating on six European countries — Italy, Spain, Portugal, Slovakia, Slovenia and Malta. It put a further three on negative watch – France, Austria and the UK, in a threat to Britain’s AAA rating.

The move, which came a few hours ago, underlines the depth of Europe’s debt crisis.

We’ll be tracking all the reaction and analysis to Moody’s move today, as well as watching events across Europe – as Greece’s future within the eurozone hangs in the balance. As usual, you can have your say in the comments below – or get in touch via Twitter. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds