Moody’s decreases UK rating forecast

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Moody’s decreases UK rating forecast
November 11
09:00 2019

The reputable agency Moody’s has left UK credit ratings at “Aa2”. The outlook for them was revised from “stable” to “negative”.

Agency analysts said that the forecast had been changed because official London had to cope with a large number of political problems. They added that those problems couldn’t but undermined the economic stability of the island state. Experts believe that in the near future the UK economy will become even more dependent on external factors.

It’s not a secret that the problematic Brexit caused the deterioration. There are still discussions on the UK interaction with the European Union. But there are still more controversial issues in the negotiation process than those ones on which consensus has been reached.

The state’s debt burden remains quite high, and it is unlikely that this indicator will improve significantly in the coming years.

Moody’s experts believe that over the next few years, the UK public debt will be 85% of GDP and then it will begin to decline.

The rather weak economic growth is another negative factor. The outflow of investments caused by the infamous referendum triggered the deterioration of the economic growth.

The stable monetary policy, a positive labor market and the diversification of the economy of the island state keep the ratings from total failure.

UK long-term ratings are as follows:

– according to S&P Global Ratings: “AA” with a “negative” outlook;

–  according to Fitch Ratings: “AA” with a “negative” outlook under review.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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