15.12.2011

By Simon Miller

Head of the French Central Bank has stoked the war of worlds between France and UK following David Cameron's treaty veto last Friday.

Christian Noyer, who is also a member of the European Central Bank told a French newspaper that the UK should be downgraded before France.

All rating agencies have warned that they are looking at eurozone countries' rating status with Standard & Poor's due to make its decision in the next few days following Friday's agreement for tougher fiscal rules.

Noyer accused rating agencies of acting in a political manner otherwise, they would start "by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping".

He told Le Telegramme de Brest: "The downgrade does not appear to me to be justified when considering economic fundamentals."

The agencies have criticised Friday's agreement as not addressing the fundamental problems of the eurozone.

Noyer added: "Frankly, the agencies have become incomprehensible and irrational. They threaten even when states have taken strong and positive decisions.One could think that the use of agencies to guide investors is no longer valid."