Spain’s debt rating cut again

Moody’s has downgraded the rating of Spain’s government bonds by two notches from Aa2 to A1 with a negative outlook just two days after Standard & Poor’s took the same decision.

Moody’s said it had cut the rating because there had been no credible resolution to the eurozone debt crisis and the debt crisis and difficulties faced by Spanish banks wanting to borrow money meant it had further scaled back its growth forecast for the country.

Moody’s is assuming that any new government to emerge after elections on November 20th will continue with measures to reduce the deficit, although it is prepared to downgrade Spain even further if this turned out not to be the case.

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