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Credit rating risk played down by Chancellor

George Osborne has played down the prospect of the UK being stripped of its cherished AAA credit rating because of his failure to hit his targets for reducing debts.

Immediately after his Autumn Statement, the credit rating agency Fitch warned of the risk of a downgrade, explaining: "In our view, missing the target weakens the credibility of the UK's fiscal framework, which is one of the factors supporting the rating."

Asked if it would matter if Britain lost its rating, the Chancellor told the BBC: "It wouldn't be a good thing, but the credit rating is one of a number of ways in which people look at countries. When people ... look at countries to invest in, they think Britain is a good investment."

The Prime Minister's official spokesman also insisted the UK was attractive to overseas investors. He said: "We are currently borrowing money at the lowest interest rates in British history. The Government remains on course to meet its fiscal mandate."

In interviews following his downbeat mini-Budget, Mr Osborne denied the poor were bearing the brunt of austerity and rejected accusations he manipulated the figures to make the Government's finances look healthier.

Most working-age benefits will rise by only 1% over the next three years, as the Government breaks the link with inflation.