MOODY'S has warned Chancellor George Osborne that the UK could lose its coveted AAA credit rating if his latest growth forecasts prove too optimistic.

Mr Osborne lowered his forecast for growth in gross domestic product – national output – this year and next year during Wednesday's Budget, admitting that the recovery will be slower than thought until 2013.

This means the Conservative-led Coalition will need an economic rebound from 2013 onwards if it is to eliminate the Budget shortfall before the 2015 General Election.

However, the ratings agency cautioned that there was more chance that economic growth in Britain would lag behind, rather than exceed, the Chancellor's predictions for 2013 onwards, thwarting his drive to cut the deficit.

Moody's said: "Slower growth combined with weaker-than-expected fiscal consolidation could cause the UK's debt metrics to deteriorate to a point that would be inconsistent with an AAA rating."

Ratings agency Fitch made a similar statement on Wednesday.

Preserving Britain's triple-A sovereign debt rating is a top economic priority for the coalition, which inherited a deficit greater than 10% of gross domestic product.

Mr Osborne's fiscal plans are heavily constrained by forecasts from the Office for Budget Responsibility, an independent Government body that provides macroeconomic and fiscal forecasts.

On Wednesday, the OBR reduced its growth forecasts for 2011 and 2012, with the 2011 growth forecast falling to 1.7% from 2.1% estimated last November.

However, Mr Osborne also raised growth forecasts for 2014 and 2015 to just under 3%, at the top end of pre-crisis estimates of Britain's long-term sustainable rate of economic growth.

Some City economists have indicated that they believe these forecasts are far too optimistic.

"Questions remain over the OBR's growth projections, which many, including us, think are still too optimistic," said David Owen, the chief European financial economist at Jefferies, a global investment bank.

In a briefing to economists, the OBR defended its strong forecasts for later in the cycle by saying that it expected household consumption to pick up as inflation fell and wage growth returned to levels of around 4%.

However, it acknowledged its predictions were vulnerable to further rises in oil prices, which are creeping towards the $120 a barrel mark.