FXstreet.com (Córdoba) - Moody's Investors Service cut its UK gross domestic product forecast on Tuesday, saying the UK economic and fiscal outlook have weakened in the wake of the ongoing eurozone crisis.
In a regular review published after the UK reported a 0.7% fall in Q2 GDP last week, Moody's lowered its GDP growth forecast to 0.4% for this year and 1.8% for 2013. However, the agency did not modify its rating credit nor its outlook, which remains negative, for the UK.
"The U.K.'s Aaa sovereign rating continues to be characterized by a large, diversified and highly competitive economy, a particularly flexible labor market, and a banking sector that compares favorably to peers in the euro area," Moody's said. "The negative outlook in part reflects concerns about the U.K.'s macroeconomic outlook for the next few years".
The UK could lose its triple A rating if Moody's thought its debt burden, deficit or funding costs were on a rising trend, the rating agency said. Moody's had moved the UK to a 'negative outlook' back in February.
Last week, Standard & Poor's, another rating agency, reaffirmed UK triple-A credit rating with a stable outlook, saying that the economy would improve toward the end of the year.
In a regular review published after the UK reported a 0.7% fall in Q2 GDP last week, Moody's lowered its GDP growth forecast to 0.4% for this year and 1.8% for 2013. However, the agency did not modify its rating credit nor its outlook, which remains negative, for the UK.
"The U.K.'s Aaa sovereign rating continues to be characterized by a large, diversified and highly competitive economy, a particularly flexible labor market, and a banking sector that compares favorably to peers in the euro area," Moody's said. "The negative outlook in part reflects concerns about the U.K.'s macroeconomic outlook for the next few years".
The UK could lose its triple A rating if Moody's thought its debt burden, deficit or funding costs were on a rising trend, the rating agency said. Moody's had moved the UK to a 'negative outlook' back in February.
Last week, Standard & Poor's, another rating agency, reaffirmed UK triple-A credit rating with a stable outlook, saying that the economy would improve toward the end of the year.
