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Page last updated at 08:23 GMT, Saturday, 6 August 2011 09:23 UK

'No credible plan to cut US debt'


The United States has lost its triple-A status with one of the most influential credit rating agencies. In an unprecedented development, Standard & Poor's (S&P) has reduced the status of the world's biggest economy to double-A-plus. A company spokesman said the downgrade could have been avoided if the country's debt ceiling had been raised in what he called "a timely manner".

According to S&P it is safer to lend to Microsoft or Luxembourg than it is to the United States, which now has the same rating as Belgium.

The BBC's business editor, Robert Peston explained that US debt is still seen to be headed for 85% of GDP and that S&P "have lost confidence in the decision-making ability of US".

And Terry Smith, chief executive of stockbrokers Tullet Prebon, told Today presenter Evan Davis that he had a lot of sympathy with S&P, adding that "there is absolutely no credible plan whatsoever" to reduce US debt.

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