One of the three big international rating agencies Moody's, has downgraded the UK's credit rating from the prized triple A (AAA) to a notch lower at Aa1. This is the first time that this has happened since 1978, taking into account that the economic prospects for the UK look bleak over the next few years and concern over the effects of it's debt reduction programme.

No great panic however as this situation is very similar throughout the eurozone, though it may dilute the UK's envied position as a safe haven for funds looking to be housed in a stable environment, something that cannot be said of large tranches of the eurozone.

The Government does feel that we can export our way out of the current doom and gloom, so a weaker pound would not be such a bad thing, making our goods even more competitive. Various trade missions, currently to India, are expected to encourage UK business to either export for the first time, or widen the markets they are already exporting to.

The downgrade is not a surprise as many analysts thought it could have happened much earlier, when we entered the double dip recession, possibly destined to have a third leg added to it in the near future.

The UK now joins France and the US as the most recent senior economies losing the top tier ranking. Whether this will add to our borrowing costs significantly remains to be seen but being quite widely expected, most rates will have had this lower credit ranking factored in.