Moody’s downgraded Britain from “Aa1” to “Aa2” from Brexit

Moscow. September 23. INTERFAX.RU – International rating Agency Moody’s lowered the sovereign ratings of the United Kingdom – long-term Issuer rating and the rating of unsecured debt is “Aa1” to “Aa2” because of the expected consequences of country’s withdrawal from the EU (Brexit).

The Outlook changed from “negative” to “stable”, says the press-release Moody’s.

The Agency recognizes the significant weakening of the Outlook for public finances in the UK since November last year, when the Outlook on sovereign rating (then “Aa1”) was changed to “negative”. Fiscal consolidation plans, developed by the British government, call the experts expect a further increase in the debt burden on the economy. The national debt will reach nearly 90% of the British GDP in the current year, the peak will probably be set in 2019 at 93% of GDP, the report says.

Fiscal difficulties will accompany the deterioration of the economic power of the United Kingdom in the medium term as a result Brexit, believe in Moody’s. The Agency expects the budget deficit of great Britain at the level of 3-3. 5% of GDP in the coming years, although the government plans to gradually reduce it to less than 1% of GDP in 2021-2022 fingado.

The growth of British GDP, according to Moody’s, will slow from 1.5 percent in 2017 up to 1% in 2018.

Moody’s also downgraded the Bank of England from “Aa1” to “Aa2”.

The ceiling long-term rating on deposits in foreign currency was reduced from “Aaa” to “Aa2”, the ceiling of the ratings on deposits in national currency and debt in foreign and national currencies has not changed – “Aaa/P-1”.

At the same time, Moody’s upgraded the ratings of Honduras with “B2” to “B1” due to stabilizatsii debt and fiscal indicators, said in a separate report of the Agency. Outlook revised from “positive” to “stable”.