S&P downgrades Belgium credit rating

S&P has downgraded Belgium's credit rating by one notch, to AA from AA+, expressing concerns about funding and market pressures.

The ratings agency also said its outlook for the country is "negative", meaning it may cut Belgium's rating further in future.

"We think the Belgian government's capacity to prevent an increase in general government debt, which we consider to be already at high levels, is being constrained by rapid private sector deleveraging both in Belgium and among many of Belgium's key trading partners," S&P said.

Yves Leterme, Belgium's caretaker Prime Minister, told Belgian television after S&P's announcement:"We need a reply that is clear and credible if we are to avoid the worst."

The move comes as the eurozone cisis intensifies and follows Moody's downgrade of Hungary last week. The ratings agency cut its foreign and local currency bond ratings to Ba1, the highest junk level score, from Baa3.