Italy credit rating downgraded

Standard & Poor's Ratings Services has downgraded Italy's credit rating by one notch, saying it sees weakening economic growth prospects for the nation and higher-than-expected levels of government debt.

S&P said it cut Italy's long- and short-term sovereign credit ratings to A/A-1 from A+/A-1+.

It said the main factors contributing to the downgrade are Italy's political and debt issues.

The ratings agency has a negative outlook on Italy's ratings. It said it anticipates that policy differences will likely limit Italy's ability to respond effectively to its debt crisis.

Italy is grappling with an outsized debt load and its government is under pressure to enact austerity measures to rein in spending.

However, S&P says that weaker economic growth will likely limit the effectiveness of Italy's fiscal consolidation programme.