News International Brexit Moody's cuts UK's credit rating to 'negative'

Moody's cuts UK's credit rating to 'negative'

The UK’s credit rating outlook has been downgraded to ‘negative’ the ratings agency Moody’s announced after the country voted to leave the EU.

Moody's said the result would herald "a prolonged period of uncertainty".

Meanwhile, PM David Cameron is under pressure to speed up "divorce" talks with the EU after Brussels said exit negotiations should start immediately.

EU head Jean-Claude Juncker said it was "not an amicable divorce", but it was "not a tight love affair anyway".

Moody's said the referendum result would have "negative implications for the country's medium-term growth outlook", and it lowered the UK's long term issuer and debt ratings to "negative" from "stable".

It added: "In Moody's view, the negative effect from lower economic growth will outweigh the fiscal savings from the UK no longer having to contribute to the EU budget."

It also said the UK had one of the largest budget deficits among advanced economies.

The financial assessment came after the UK voted to leave the EU, and a defeated Mr Cameron said he would step down as leader by autumn.

Pro-Leave MP Boris Johnson is tipped as favourite to replace him.

Cameron had urged the country to vote Remain in Thursday's referendum but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in.

On Friday morning, he stood outside 10 Downing Street to announce he would remain in place for the short term and then hand over to a new prime minister by the Conservative conference in October.

He said he would attempt to "steady the ship" over the coming weeks and months, but that it would be for the new prime minister to carry out negotiations with the EU and invoke Article 50 of the Lisbon Treaty, which would give the UK two years to negotiate its withdrawal.

But in an interview with German TV, European Commission President Jean-Claude Juncker said: "Britons decided yesterday that they want to leave the European Union, so it doesn't make any sense to wait until October to try to negotiate the terms of their departure - I would like to get started immediately."

He said the EU would pursue a "reasonable approach" in negotiating the separation.

Source: BBC
 

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