Britain downgraded by Moody's on Brexit concerns

A few hours after Prime Minister Theresa May set out plans for a new relationship with the European Union Moody's cut the rating to Aa2 from Aa1 underscoring the economic risks that leaving the bloc poses for the world's fifth-biggest economy

Britain downgraded by Moody's on Brexit concerns

Ratings agency Moody's has downgraded the UK's credit rating as Brexit threatens to slow economic growth.

Credit rating agencies, in essence, rate a country on the strength of its economy - scoring governments or large companies on how likely they are to pay back their debt.

"The assessments made about Brexit in this report are outdated", a government spokesperson said in a statement provided by the finance ministry.

This was linked partly to an economic slowdown already under way, but also reflected increased political pressure on the ruling Conservative Party to raise spending after seven years of fiscal belt-tightening, Moody's said.

"More recently, the government has yielded to pressure and raised spending in several areas, including for health and adult social care".

Bayern fumble to a draw at home
With Bayern looking comfortable, a mistake from Ulreich gifted Wolfsburg a route back into the game in the 56th minute. At 2-1, Wolfsburg sensed their opportunity, as Yunnus Malli repeatedly threatened Bayern on the left flank.

Pakistan announces Test squad for Sri Lanka series
Pakistan announced its test squad for the two-match test series against the island-nation on Saturday. Inmamul Haq said, "We have selected five fast bowlers for the squad against Sri Lanka".

Dominica declares state of emergency
Maria is now moving off the coast of Dominican Republic and heading in the direction of the Bahamas and Turks and Caicos islands. Skerrit said it was a miracle hundred more are not dead considering the level of destruction.

Brexit was likely to dominate the legislative process for the foreseeable future, making any innovative legislation needed to help public services without increasing budgets unlikely. As a result, the budget deficit was likely to remain at around 3-3.5 percent of GDP in the coming years, higher than the government's plans to cut it below 1 percent of GDP by 2021/22.

Moody's downgraded Britain's sovereign rating by one notch last night, to AA2, over what it called weakening public finances and rising debt.

Spurred by the pound's sharp depreciation after the Brexit vote a year ago, accelerating inflation has squeezed consumer spending, one of the key drivers of the United Kingdom economy, causing it to slow visibly in recent months. Moody's said it was no longer confident that Britain would secure a replacement free trade agreement with the European Union which substantially mitigated the Brexit hit. Britain's government said Moody's move brought it into line with the other major credit ratings agencies, Fitch and Standard & Poor's.

Moody's changed its outlook on the country from negative to stable, meaning another downgrade is not imminent.

Latest News