A cake designed in a Union Flag is seen at a street party to celebrate the wedding of Prince William and Kate Middleton in Lavenham, Suffolk 

The Treasury said Fitch’s decision ‘is a stark reminder that the UK cannot simply run away from its problems’ Photo: PA

6:05PM BST 19 Apr 2013

Fitch joined Moody’s in downgrading the UK to AA+ “to reflect a weaker economic and fiscal outlook” that has caused both the budget deficit and national debt to soar above earlier forecasts.

It means that only Standard & Poor’s has the UK on the top rating, albeit on “negative outlook”.

The downgrade was blamed on “the weak growth performance of the UK economy in recent years, partly due to private and public sector deleveraging and the eurozone crisis”.

It will come as another damaging blow to the Chancellor, who has already been under pressure from the International Monetary Fund this week to kick start growth by easing up on austerity.

However, Fitch said its decision to place the UK on a “stable” outlook “assumes a continued policy commitment to reducing the underlying budget deficit”.