Osborne to stay firm on economy

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Chancellor George Osborne has insisted he will not change course despite the loss of the UK’s AAA credit rating.

Forced to make a Commons statement yesterday on the decision by rating agency Moody’s to downgrade the UK one notch to AA1, Mr Osborne insisted: “We will go on delivering on the economic plan that has brought the deficit down by a quarter.”

He told MPs there had not been “excessive volatility” as the markets gave their reaction to the Moody’s decision.

However, Mr Osborne was greeted with calls of “resign” from Labour back-benchers as he responded to an urgent question from shadow chancellor Ed Balls, who went on the attack saying the “downgraded Chancellor” had failed the the first economic test he set himself.