Brexit : Moody’s threat to downgrade the Uk – The Point

The consequences of Brexit on the uk economy are still unclear, but worried about the rating agency Moody s. on Wednesday 2 November, she notified that the note of the United Kingdom could be lowered if the negotiations on the Brexit led to a loss of access to the european single market for the country. The United Kingdom is for the time noted Aa1 from Moody’s but the agency has, however, with this assessment of a negative outlook, which means that it is considering a downgrade in the medium term.

” We abaisserions the sovereign rating of the United Kingdom if the result of the negotiations with the EU was a loss of access to the single market “, wrote in a press release Kathrin Muehlbronner, an analyst at Moody s. In his study, which is not a decision on the rating, Moody’s says that if the country was cut off from the single market of the european Union, this would have a significant impact on its economic growth. The agency indicates that a broad free-trade agreement that would limit the negative impact of Brexit on growth remains a possibility but is not certain.

Theresa May stuck between Moody’s and the pro-Brexit

The fuzzy rules for the time on the strategy of the british government, while the kick-off of the negotiations on the Brexit must be given by march 2017. In theory, the First minister Theresa May may not retain access to the single market if it renounces to the free movement of persons, which is a measure demanded by the pro-Brexit. Moody’s adds to be also attentive to the fiscal outlook of the United Kingdom, hoping to get clarification on the occasion of the declaration of the fall scheduled for 23 November. The Finance minister Philip Hammond is expected on this occasion to announce an assistance plan to support the activity as well as an easing of the austerity cure imposed on the country since 2010.

This study is published as the rating agency SP Global Ratings announced last Friday that it had maintained the note of the United Kingdom, but by always seeking a possible downgrade because of the risk that poses the Brexit on the uk economy.