12 Oct 2012

Spain's credit rating downgraded

9:52 am on 12 October 2012

Standard Poor's has downgraded Spain's credit rating, highlighting a deepening recession and mounting pressure on Madrid's finances.

The ratings agency cut Spanish debt from BBB+ to BBB- and warned of possible further downgrades.

The BBC reports Spain has the highest rate of unemployment in the eurozone.

"The downgrade reflects our view of mounting risk to Spain's public finances, due to rising economic and political pressures," SP said.

The government last month announced budget cuts of around 13 billion euros next year, by cutting public sector wages, education, health and social services.