Standard and Poor’s lowers Portugal debt rating

Standard and Poor’s lowered its rating for Portugal’s long-term public debt Thursday two notches to “BBB” from “A-” following the defeat of an austerity package and the government’s resignation.

“In our view, the resulting increased political uncertainty could hurt market confidence and heighten Portugal’s refinancing risk,” the ratings agency said in a statement.

Portugal’s short-term credit rating remained unchanged at “A-2,” but its long-term credit rating went down two notches, from an “A-” to “BBB”, it said.

Portugal’s prime minister Jose Socrates resigned earlier in the day after the parliament rejected his latest austerity package.