Ratings agency Fitch has reaffirmed its 'triple A' credit rating on the UK but with a negative outlook.
Fitch has had the UK on negative outlook since March of this year.
In a statement this evening the ratings agency said "weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating".
Fitch expects only a weak recovery beginning in 2013
It says economic output is not expected to exceed pre-2007 crisis levels until the following year.
It notes the UK's flexibility on monetary policy and the status of sterling as a reserve currency as positives and says both factors add to the country's ability to tolerate higher levels of public debt than some of its European peers.
Fitch says, however, that the UK is suffering as a result of global economic headwinds. It says the ongoing euro zone debt crisis will act as a drag on growth.
The ratings agency says these impacts are compounded by depressed business and consumer confidence, weak investment, and constrained lending growth.
Fitch now expects the UK economy to contract by 0.3% in 2012 compared to an expectation of growth of 0.8%
