George Osborne is braced for financial markets to deliver their first reaction to Britain's loss of its prized AA credit rating.
Ministers and senior party figures have rallied round the Chancellor in the wake of the decision by agency Moody's, predicting it will have little impact on the Government's borrowing costs.
But there are fears that sterling will be hit hard in the wake of the news. Tory backbenchers also upped calls for tax and spending cuts to kick-start growth, warning that next month's Budget is the "last chance saloon".
Meanwhile, Labour reiterated its calls for borrowing to be increased in the short term to fund a fiscal stimulus.
Explaining its move on Friday, Moody's pointed to "subdued" growth prospects in the UK and a "high and rising debt burden". It now expects the "period of sluggish growth" to "extend into the second half of the decade".
Speaking on the BBC's Andrew Marr Show on Sunday, Business Secretary Vince Cable dismissed the downgrade as "largely symbolic".
The Liberal Democrat said: "In terms of the real economy there is no reason why the downgrade should have any impact. If you remember last year the US was downgraded, the economy grew strongly relative to Europe... and France had a downgrade last year, its interest rates that it borrows long term in the markets are only a little above ours.
"These things do not necessarily affect the real economy but they reflect the fact that we are going through a very difficult time and we are trying to balance the need to get the deficit and the budget under control with the need to get back to economic growth."
Mr Cable also flatly ruled out deeper spending cuts, suggesting that kind of policy was coming from "right-wing ideologues". He said: "I think to embark on a slash and burn policy in response to this would be utterly foolish and counterproductive, and I am sure we will not be going there."
Mr Cable said the argument about whether the coalition should shift from plan A to plan B was "a bit juvenile".