Moody’s lower outlook for the UK – publico

 
         

                 

                         
                     

                 

 
 

The financial Moody’s rating agency lowered the outlook on the public debt of the United Kingdom, passing them from stable to negative and warned that the note given to the country may change soon, due to the impact of “Brexit” in the markets and the economy.

After Thursday’s referendum, where the British decided by majority vote to leave the European Union (EU), Moody’s downgraded the debt outlook considering that there is a risk of growth economy is weaker than expected and a deterioration in UK public finances.

“in the coming years, in which the United Kingdom will have to renegotiate their trading relationship with the US, Moody’s anticipates that uncertainty, the decline in confidence and the reduction of expenses and investment result in weaker growth, “said the agency in a statement on Friday night.

But the warnings about the impacts of “Brexit” did not stop there. “The UK has one of the highest budget deficits in the advanced economies, and reduce GDP growth will hinder the implementation of the fiscal consolidation plan provided by the Government [of outgoing Prime Minister David Cameron],” says Moody’s .

the agency also noted that the EU is the main trading partner of the United Kingdom, absorbing 44% of its exports and 48% of foreign direct investment in the country originates in European countries.

“it is possible that the UK is able to redirect its trade to other regions and so compensate for the reduction of trade with Europe,” anticipates, “but it will take time.” The solution, suggests Moody’s, will undergo reach an agreement with the US that will preserve a large part of trade between the two blocs.

Currently, the rating UK is rated AA +, the second highest rating assigned by Moody’s.

Moody’s was the first agency to achieve their fears because of the victory of the “leave” (exit). Standard & amp; Poor’s warned that the note attributed to the country (which is now AAA, the best awarded by this agency) could be at risk, but chose not to propose any changes. Already Fitch considers that the referendum results will have an effect “moderately negative”.