POLITICS
16/12/2011 04:48 GMT | Updated 16/12/2011 05:34 GMT

Bernard Jenkin, Tory MP, Says UK Could Lose Its AAA Rating

There is "no guarantee" the UK will keep its AAA credit rating, a Tory MP warned on Friday morning.

Eurosceptic Conservative MP Bernard Jenkin said the "happy family" of Europe was "not working" and if the euro crumbled, Britain's credit rating could too.

"I don't think there's any guarantee that the UK will keep a triple-A rating. If the euro goes down and we suffer a decline in economic growth as a consequence our rating may well be affected. We do have the flexibility, we have our own central bank and can set out own interest rates so our exchange rate floats," he told BBC Radio 4's Today Programme.

Jenkin's warning came as the governor of France's central bank Christian Noyer attacked Britain's AAA rating, and after French finance minister Francois Fillon told journalists "our British friends have a higher deficit and more debt, and I would say that the ratings agencies have not yet noted that."

France is bracing itself for the potential loss of its coveted AAA rating after two credit agencies last week indicated they were considering marking down countries across the eurozone.

The UK will take part in discussions about the new eurozone treaty despite prime minister David Cameron vetoing Britain being a part in the pact. But Britain's representatives will not be allowed to vote on any proposed changes.

On Thursday Christine Lagarde, managing director of the IMF, issued a stark warning to world markets by claiming the future was “gloomy” for every economy in the world.

"There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating," she said.

"It is not a crisis that will be resolved by one group of countries taking action. It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking action.

"It is going to require efforts, it is going to require adjustment, and clearly it is going to have to start from the core of the crisis at the moment, which is obviously the European countries and in particular the countries of the eurozone."

Meanwhile, the European Central Bank said in a report on Thursday that Europe needs to adhere to stricter budgetary rules than agreed to at the Brussels summit last week.

And, Mario Draghi, president of the European Central Bank, said in a speech on Thursday that there was "no external savior" for the eurozone and that struggling countries should supposedly save themselves by cutting spending and agreeing to more control of their budgets by the European Union, according to the Associated Press.