Moody's downgrades Spanish debt

Credit agency Moody's has cut the rating of Spanish government bonds by two notches, echoing Standard & Poor's decision two days ago.

Spain's rating was cut from Aa2 to A1 with a negative outlook. Moody's said the difficulties facing Spanish banks wanting to borrow money had led the agency to scale back its growth forecast for the country. "Moody's is maintaining a negative outlook on Spain's rating to reflect the downside risks from a potential further escalation of the euro area crisis," the agency said in a statement. Moody's will also be be keeping a watchful eye on the new Spanish government, following elections on 20 November, with the expectation it will implement measures to reduce the deficit. The rating...