London: Britain’s credit rating has been cut over concerns about the UK’s public finances and fears Brexit could damage the country’s economic growth. Moody’s, one of the major ratings agencies, downgraded the UK to an Aa2 rating from Aa1 on Friday, BBC reported.
It said leaving the European Union was creating economic uncertainty at a time when the UK’s debt reduction plans were already off course.
Downing Street said the firm’s Brexit assessments were “outdated”.
The other major agencies, Fitch and S&P, changed their ratings in 2016, with S&P cutting it two notches from AAA to AA, and Fitch lowering it from AA+ to AA.
Moody’s said the government had “yielded to pressure and raised spending in several areas” including health and social care.
It says revenues were unlikely to compensate for the higher spending.
The agency said because the government had not secured a majority in the snap election it “further obscures the future direction of economic policy”. It also said Brexit would dominate legislative priorities, so there could be limited capacity to address “substantial” challenges. — IANS
Oman Observer is now on the WhatsApp channel. Click here
