James Moore: Should we care what Paris Hilton thinks of our party?

The fact that the UK has so far escaped any hint of a credit downgrade has long been cited by the Coalition to support its preferred combination of spending cuts and tax rises to deal with the budget deficit. For goodness sake stop complaining about your hospital closing: Britain's still a AAA nation (Aa1 or somesuch in Moody's speak).

While others are hit with downgrades, good old Blighty stands alone, and it's all because the Gentleman's not for turning. Oh dear. It looks like Moody's has gone and spoiled the party. Its decision to put the UK on negative credit watch has prompted a fresh round of agonising about the economy, already in the midst of a dangerous dance with the dreaded double dip.

But beyond giving Ed Balls the excuse to flash one of those smiles that frightens small children, what has Moody's action actually contributed to the debate?

Ratings agencies such as Moody's are the Paris Hiltons of the economics world. Just like the talentless socialite, when they come out to play a huge fuss is created. Their pronouncements are hotly debated and analysed to the nth degree. Economics commentators queue up to pronounce on their actions, just as the fashion press queue up to pronounce on La Hilton's frocks.

Yesterday, they included no less than the Institute for Economic Affairs, as well as Mr Balls, sundry other economists and someTreasury sources insisting that it will be worse for Britain if it fails to stay the course.

They are all getting terribly hot under the collar about something that is, in reality, essentially meaningless. Like Paris, really.

You would think, by now, that people might have woken up to this. Moody's and its competitors, Standard & Poor's and Fitch, proved beyond all reasonable doubt that they were wearing the emperor's new clothes during in the run up to the credit crisis. That was when investment grade ratings appeared to be available to any dodgy mortgage-backed securitythat had the involvement of an investment bank with a fancy name somewhere in its creation.

Bond investors certainly appear to be of this view, with gilts suffering only a mild correction yesterday despite the unexpectedness of Moody's move. The only worry, in fact, is that while the markets have largely woken up to the weakness of the rating agencies' case, politicians still seem to set a certain amount of store by a country's rating.

Mr Osborne fell into the trap yesterday by trying to say that Moody's actually strengthened the arguments for his policies. It did nothing of the sort. He would have been better to take his cue from the bond markets and leave Paris, Moody's and their friends to their own devices.