Moody's puts Britain on negative credit outlook But weak economic growth raises significant doubt about that, the agency said, noting that the Government has "reduced capacity" to absorb any new economic shocks without "slippage" on its timetable. The Government is currently paying record-low interest rates on its bonds, partly because investors see the UK as a "safe haven," the agency said. However, there is "also a growing risk that the weaker macroeconomic outlook could damage market confidence in the government's fiscal consolidation programme and cause funding costs to rise." Moody's set out three scenarios that could see UK follow economies like France and the US in the loss of AAA status. The first is a combination of slow growth and a "reduced political commitment to fiscal consolidation," most likely a Government decision to slow its cuts. The second is a sharp rise in the rate paid on Government bonds, possibly because of a sudden rise inflation or a loss of market confidence. The third is a new banking crisis, triggering fresh Government bailouts for the financial sector. George Osborne, the Chancellor, last night insisted that the Moody's warning was proof that the Coalition must stick to its plans on the deficit. He said: "This is proof that, in the current global situation, Britain cannot waver from dealing with its debts."