"The pressure on the US rating is increasing, " said Fitch's David Riley, adding that if there was no deal, there was a "material risk" of a downgrade.

BBC: Triple A letters

Fitch said after Mr Osborne's announcement that the government's policy framework had been a key factor helping the UK to hold on to to its top AAA credit rating, and the loss of the debt rule had weakened both the coalition's credibility and the rating.

BBC: Autumn Statement: What has changed?

Late Wednesday afternoon in Europe, Fitch Ratings said it had cut Iceland's long-term sovereign currency issuer default ratings to "BBB-, " from "A, " putting them firmly in "junk" territory.

FORBES: Market Scan

Quite how near was signalled by the ratings agency Fitch yesterday, which said that OBR's forecasts of rising government debt had reduced the UK's capacity to absorb further shocks and retain its AAA rating.

BBC: Cheer up: It could be much worse

Fitch said it was not convinced by the Greek government's plans to reduce state spending, saying that the state debt burden was likely to rise to close to 130% of gross domestic product and that further fiscal slippage could result in another downgrade.

FORBES: Europe Markets Brief

The country's financial position is now so strong that it can cope with most shocks, said Fitch.

ECONOMIST: The government signals the end-game | The

"However, weaker-than-expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating, which has been on negative outlook since March 2012, " Fitch said in a statement, meaning it is still on review for a possible downgrade.

MSN: Fitch affirms UK at AAA but warns on debt, economy