Standard & Poor's has become the last big credit ratings agency to give the U.K. government a bloody nose by downgrading the outlook on Britain's triple A rating to negative.
The agency said it had become concerned at the weak recovery and an insufficient improvement in the public finances.
With all three large credit ratings agencies giving Britain's triple A status a negative outlook, many analysts think it is only a matter of time before one pulls the trigger and downgrades U.K. debt.
The move by S&P could be more difficult for Chancellor of the Exchequer George Osborne than those by the other agencies because S&P removed its negative outlook he imposed a tougher austerity drive after taking office in 2010.
S&P said: "The negative outlook reflects our view of a one-in-three chance that we could lower the ratings in the next two years if the UK's economic and fiscal performances weaken beyond our current expectations."
The warning comes a week after Fitch said the government's Autumn Statement had "weakened the credibility of the UK's fiscal framework," hinting that it was getting closer to downgrading Britain's rating.
S&P praised the government's "commitment to implementing its fiscal mandate" and the high demand for government bonds, but warned that general government debt risked approaching 100 percent of national income, a level it believes is rarely compatible with a triple A rating.
Giving evidence to MPs on Thursday, Osborne, who had warning of S&P's move, downplayed the importance of ratings agencies.
"It's one test alongside others and the ultimate test is what you can borrow money at," he told the Treasury select committee. "The test we have is one we have to meet every week when we go and try and sell our gilts."
Osborne would suffer a personal credibility knock if any of the ratings agencies removed the triple A rating, as he made its maintenance a key plank of his economic strategy before the election. In February 2010, he said the "first benchmark for Britain is to cut the deficit more quickly to safeguard Britain's credit rating."
The Treasury said: "In their assessment, S&P endorse the government's 'strong commitment to implementing the fiscal mandate' and specifically warn against slowing 'the pace and extent of fiscal consolidation.' It is because we have stuck to that commitment that the deficit is down by a quarter and interest rates are at record lows."
S&P have already downgraded France and the U.S. and only Germany has a secure triple A rating on its measures.