Image caption Banks and commodity stocks fell sharply on Friday

Prime Minister David Cameron has spoken to French President Nicolas Sarkozy to discuss eurozone finances and the US credit rating being downgraded.

Downing Street said that, in a phone conversation, they agreed on "the importance of working together".

Meanwhile, Chancellor George Osborne, who is on holiday, spoke to the head of the International Monetary Fund and the current European Union president.

But Labour accused the government of "complacency" in the financial crisis.

On Friday, Standard & Poor's downgraded the AAA rating for the US for the first time, citing budget deficit concerns.

On the same day, European stock markets continued to fall with investors worried about the eurozone debt crisis and the weak US economy.

Eroding confidence

It came as fears over the ability of governments to pay their debts - which have led to Greece, the Irish Republic and Portugal already being bailed out - spread to Spain and Italy.

Correspondents say the downgrade could erode investors' confidence in the world's largest economy.

Meanwhile, shadow chancellor Ed Balls criticised the prime minister, chancellor and their deputies for taking their holidays at the same time.

Analysis The UK government's attitude towards the US downgrade has been bordering on smug. One government spokesman said it meant that Britain had been "uprated". It's true that the UK retains triple-A status and that that allows it to borrow at cheaper levels on the international money markets. It's also true that it retained that rank thanks to decisive and politically unpopular measures to get the ballooning deficit down since taking office. What's inaccurate is the impression that Britain might always retain its AAA status - especially now that the seal has been broken and the world's most powerful economy has been downgraded. Watch out for markets and rating agencies kicking all triple-A tyres that bit harder in the coming months and years if they let up in cutting their costs. A downgrade would be a notable Plan B for George Osborne.

Despite being on holiday, Mr Cameron discussed "the euro area and the US debt down grade", according to a Downing Street spokesman.

"Both agreed the importance of working together, monitoring the situation closely and keeping in contact over the coming days," he said.

Meanwhile, the chancellor, who is currently on holiday in the US, spoke to Jacek Rostowski, finance minister of Poland, which currently holds the rotating presidency of the European Union.

Mr Osborne also spoke to Christine Lagarde, the new head of the International Monetary Fund.

A Treasury spokesman said the phone conversations were part of ongoing international discussions about the impact of the US credit downgrade on the global economy and problems in the euro area.

But shadow chancellor Ed Balls launched an attack on the government's handling of the current financial crisis.

Writing in the Sunday Mirror, Mr Balls said there was a "lack of leadership" in the government.

"In ­previous times of crisis the British chancellor would be at the head of the table co-ordinating the global response, but for months Mr Osborne has been ­absent from the debate about how to get the world economy growing," he said.

Mr Balls went on: "Instead, our complacent chancellor tells us not to worry because Britain is a "safe haven" from the economic storm.

Austerity measures 'vindication'

"The ­reality is we are in the eye of the storm. Because by trying to go too far and too fast to bring down the deficit, Mr Osborne choked off last year's ­recovery."

S&P ratings (selected) AAA: UK, France, Germany, Canada, Australia

UK, France, Germany, Canada, Australia AA+: USA, Belgium, New Zealand

USA, Belgium, New Zealand AA-: Japan, China Source: S&P

Mr Balls called for "a plan for growth" including a bank bonus tax to get young people into work and a temporary VAT cut.

Earlier, Downing Street sources said the US situation had "vindicated" Britain's austerity measures.

The government says the UK's AAA credit rating has been preserved, but a change would put it "back in the firing line".

A Treasury source said that "economic turbulences" showed the need to stick with the current economic policies.

"Thanks to the decisions we have taken to deal with Britain's debts and support a sustainable recovery our credit rating has been reaffirmed."

Downing Street says there is no "Plan B" alternative to austerity measures.