US may lose Triple A credit rating due to debt deadlock

By The Newsroom
Published 14th Jul 2011, 18:54 BST
Updated 15th Jul 2011, 00:46 BST
THE US is the latest country to face warnings it could lose its prized Triple A credit rating as a result of the political deadlock over its debts.

Ratings agency Moody's said that failure to agree a deal on raising the country's $14.3 trillion debt ceiling would trigger to a downgrade.

The crisis has been sparked by President Barack Obama's call to increase the country's debt limit to allow it to borrow yet more funds.

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However, House Republicans are calling for a fully worked-up debt reduction package before signing up.

The deadline is 2 August, when it is expected that the US Treasury will be unable to meet some debt repayments.

"The review of the US government's bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes," said Moody's.