Italy government bond rating drops

Press Association
Italy landscape
Italy landscape

Credit ratings agency Moody's Investors Service has downgraded Italy's government bond rating two notches on concern that deteriorating financial conditions in Europe will lead to a sharp rise in borrowing costs.

The agency lowered the rating to Baa2 from A3 because it said fragile market confidence and risk of contagion from financial problems in Greece and Spain have increased the risks Italy faces.