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Italy credit rating downgraded

Standard & Poor's Ratings Services has downgraded Italy's credit rating by one notch, saying it sees weakening economic growth prospects for the nation and higher-than-expected levels of government debt.

S&P said it cut Italy's long- and short-term sovereign credit ratings to A/A-1 from A+/A-1+.

It said the main factors contributing to the downgrade are Italy's political and debt issues.

The ratings agency has a negative outlook on Italy's ratings. It said it anticipates that policy differences will likely limit Italy's ability to respond effectively to its debt crisis.

Italy is grappling with an out-sized debt load and its government is under pressure to enact austerity measures to rein in spending.

But S&P says that weaker economic growth will likely limit the effectiveness of Italy's fiscal consolidation programme.

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