Moody's, which rates the UK one notch below triple-A with a stable outlook, said the budget's "significant downward revision" to the economic growth outlook for the coming years and an upward revision to deficit forecasts were the two key negative factors.

"Hence, compared to the government's earlier targets, the pace of fiscal consolidation is now markedly slower, and the UK's public finances will remain weaker for a longer period of time," Moody's said in a report.

"This is credit negative, given that the UK still has one of the largest budget deficits among its EU peers."

The pressure in terms of the deficit could increase further.

Moody's said the report did not take into account that Prime Minister David Cameron and Chancellor George Osborne have had to abandon some of the budget's plans to cut sensitive parts of welfare spending such as disability benefits.

The proposals were widely criticised for being unfair and saw a high profile minister quit in protest.

It also stacks on top of uncertainty ahead of a public vote on June 23 over whether Britain should remain in the European Union.

In a separate report on Tuesday Moody's said it saw "clear downside risks" if Britain left the EU, and repeated its warning that this would make the country more vulnerable to a downgrade.

Rival agency Standard and Poor's, which rates Britain as top-grade triple-A albeit with a negative outlook has said it could downgrade it by as much as two notches if it quit the EU.

(Reporting by Marc Jones; editing by John Geddie/Jeremy Gaunt)

By Marc Jones