LONDON (AP) ― The man in charge in Britain’s economy says he won’t change direction despite a rating agency’s decision to downgrade the nation’s credit rating and he spurned renewed calls from the opposition for more stimulus for a flat-lining economy.

Treasury chief George Osborne declared that the action by Moody’s Investors Service redoubled his commitment to the government’s police of cutting spending in an effort to reduce deficits.

But Labor Party spokesman Ed Balls said Saturday that the government should increase borrowing to give immediate stimulus to the economy.

Announcing the downgrade one notch from the top “AAA” to “AA1” on Friday, Moody’s said sluggish growth and rising debt were weakening the British economy’s medium-term outlook.

Osborne had once boasted of the triple “AAA” rating as validating his policy, but he soft-pedaled its importance as a downgrade became increasingly likely. Two other major rating agencies ― Fitch and Standard & Poor’s ― have Britain still at “AAA” but on negative watch.

Howard Archer, chief European economist for IHS Global Insight, said the expectation of a downgrade “may actually mean that there is little negative economic impact from the move.”

“The negative impact for the U.K. is also likely to be limited by the fact that there are now very few countries left that have a “AAA” rating from all of the credit rating agencies,” Archer said.

Public sector borrowing remains stubbornly high, and is forecast by the government’s Office for Budget Responsibility to be around 120 billion pounds ($182 billion) for the year ending in April, little changed from the previous year. 

The U.K. economy stagnated in 2012, with just one quarter of growth.

Osborne said in a statement that the downgrade was “a stark reminder of the debt problems facing our country,” with a debt accumulated over the years exacerbated by Europe’s economic crisis.

“We will go on delivering the plan that has cut the deficit by a quarter, and given us record low interest rates and record numbers of jobs,” Osborne said.

Balls charged that Osborne was incapable of admitting a mistake.

“The plan has not worked,” Balls said.

“I think the prime minister (David Cameron) is going to have to ask himself, ‘how do I get change in our economic policy for the good of the nation?’” Balls added.