The FTSE 100 is expected to open lower after Fitch downgraded the US credit rating in a decision branded “arbitrary” by the country’s Treasury Secretary.

European markets including Britain’s blue chip index are poised for declines after the world’s largest economy was stripped of its top level AAA credit grade two months after it nearly defaulted on its debts.

The credit grader cut the US one level from AAA to AA+, echoing a move made more than a decade ago by S&P Global Ratings.

Janet Yellen, the US Treasury Secretary, said she strongly disagreed with Fitch, calling the rating change “arbitrary and based on outdated data”.

She said: “Fitch’s quantitative ratings model declined markedly between 2018 and 2020 — and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision.”

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