Credit rating giant Moody's has warned that the UK risks losing its AAA credit rating as its debts become increasingly hard to service.
In its most recent survey it singled out the UK, USA, France, Germany and Spain as countries that will all have a particularly difficult time removing stimulus measures and bringing debt into line.
The report says that, "Growth alone will not solve an increasingly complicated debt equation." Instead, according to Moody's, the government will have to institute a series of difficult fiscal tightening measures - the severity of which "will test social cohesion."
The rating agency is concerned that the government will be forced "to make painful choices that expose weaknesses in society." But it also cautioned against removing stimulus measures too early, suggesting that this could stymie any potential recovery.
In response, the Treasury pointed out that its average debt maturity is around 14 years. This gives the UK twice the period enjoyed by other countries to pay off its debts.
