From the FXWW Chatroom: The UK’s sovereign rating was downgraded one level by Moody’s on Friday to Aa2, two notches below the highest opinion bestowed by the US credit rating agency, as Brexit pressures the country’s economic strength and the country’s debt levels rise.
Analysts with Moody’s blamed “increasingly apparent challenges” to policymaking in the wake of the Brexit vote and increased scepticism over the government’s ability to cut costs.
“Moody’s expects weaker public finances going forward, partly linked to the economic slowdown under way but also reflecting the increasing political and social pressures to raise spending after seven years of spending cuts,” said Kathrin Muehlbronner, an analyst with the rating agency.
Moody’s changed its outlook on the UK to stable. Along with the downgrade to the UK’s sovereign rating, Moody’s also cut its rating on the Bank of England to Aa2 from Aa1.
“Moody’s expects weaker public finances going forward, partly linked to the economic slowdown under way but also reflecting the increasing political and social pressures to raise spending after seven years of spending cuts,” said Kathrin Muehlbronner, an analyst with the rating agency.
Moody’s changed its outlook on the UK to stable. Along with the downgrade to the UK’s sovereign rating, Moody’s also cut its rating on the Bank of England to Aa2 from Aa1.
Fitch downgraded the UK on June 27, 2016, to double A, from AA+, and put the country on a negative outlook. It affirmed this rating in May, when the outlook remained negative, which reflected “heightened uncertainty” following the Brexit vote. The UK lost its Fitch triple A rating in 2013.
Moody’s last downgraded the UK on June 24 last year, to Aa1 negative. On its last report, published in July, the outlook remained negative. The key credit challenge was “the uncertainty as to whether the government can deliver a reasonably good outcome regarding the negotiations to leave the EU”.
S&P lowered its rating for the UK to AA in June 2016. In a report published in April this year, it said the outlook remained negative, citing continuing risks from the Brexit process.
Moody’s last downgraded the UK on June 24 last year, to Aa1 negative. On its last report, published in July, the outlook remained negative. The key credit challenge was “the uncertainty as to whether the government can deliver a reasonably good outcome regarding the negotiations to leave the EU”.
S&P lowered its rating for the UK to AA in June 2016. In a report published in April this year, it said the outlook remained negative, citing continuing risks from the Brexit process.
View the latest market information in the FXWW Chatroom with a free trial.