Debt crisis: Moody's downgrade of Britain's banks to hit families But analysts warned that the costs could still be passed on to families and businesses. Andrew Tyrie, Conservative chairman of the Treasury select committee, said: "Any increase in the cost of funding would add to the squeeze on banks. The UK needs the banks to recover - we can't have a full economic recovery without them. This is particularly important to hundreds of thousands of small businesses and sole traders who have difficulty getting access to loans at reasonable rates. Barclays saw its credit rating cut by two grades from Aa3 to A2. HSBC's rating also fell by two grades, while RBS and Lloyds experienced a reduction of one. Other large banks around the world faced reductions in their ratings as Moody's took a more pessimistic view about the impact of the European crisis on the financial sector. The agency had signalled earlier this year that it was preparing for the downgrade, but shares in the big British banks still fell ahead of the move on Thursday. Barclays and RBS shares closed down 1.7 per cent, while HSBC fell 1.1 per cent. US shares also fell sharply amid growing concerns about the global economy. Anticipating the downgrades, the Treasury and the Bank of England last week announced new measures to give banks access to billions of pounds in credit at low rates. Business groups have repeatedly criticised banks for not lending enough, warning that lack of access to credit is causing some viable companies to go under. Lord Oakeshott, a former Lib Dem Treasury spokesman, said that after the Government's latest intervention, the banks would have no reason to use a downgrade to increase the rates they charge customers. The banks have just had their mouths stuffed with even more government gold. It would stink if they hid behind a downgrade to hoard the extra tens of billions taxpayers have handed them instead of lending it to head off a slump. The peer challenged the banks to absorb any additional funding costs they face by cutting other costs, including executive pay, instead. "If they even cut £5 million from bonus packages, they could lend another £100 million to help businesses," he said. Gary Greenwood, a banking analyst at Shore Capital, a stockbroking firm, said that, despite market expectations, the downgrades could still have some impact on households and companies. "If banks see funding costs rise, they will try to pass that on to their customers," he said. Many players in the money markets had largely "priced in" a downgrade, he said, but some funds still took a "mechanistic" view of ratings and would automatically increase the rates they charge to lend to banks. John Cridland, the director-general of the CBI, on Thursday night called on the Government and the Bank of England to keep up their efforts to ensure credit flowed to companies and households. "The fact is we need to raise levels of finance in the economy to support our growth aspirations," he said. I want to see urgency to stop the recovery being choked off by a lack of finance. The bank downgrades came amid more turmoil on financial markets caused by worries about the prospects of the US economy. American markets fell sharply after new figures showed unemployment there was worse than expected and that the manufacturing sector was weaker than forecast. Adding to fears about global outlook were fresh signs of trouble in the eurozone, where independent auditors warned that Spain's banks may need another £50 billion to stay afloat. Other eurozone countries have already offered more than £60 billion to support Spain's financial sector. European leaders have so far failed to agree on a separate plan to use European Union bail-out funds to buy the bonds of struggling countries like Spain and Italy, reducing their costs. German, French, Italian and Spanish leaders will discuss the bond-buying plan in Rome today.