By Max Clarke

Greece has again had its credit rating cut to Caa1 from Ca by New York ratings giant, Moody’s.

This marks a move from a “highly speculative” investment to one of “poor standing and are subject to very high credit risk” that may suggest the institution is in danger of imminent default.

This is despite last week’s agreement by creditors to extend the terms of loans to Greece and other indebted states in a bid to prevent a chain reaction of economic collapses that spreading across Europe.

"The support package for Greece also benefits all euro area sovereigns by containing the severe near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt", Moody’s were quoted by the BBC.

This downgrade comes as the US are considering extending their debt ceiling- a move blasted by Vince Cable as the behaviour of right wing ‘nutters’ who risk throwing the world back into recession. Greece’s likely default is overshadowed by the US debt picture, warns Cable.