US credit ratings agency, Moody's Investors Service, is out with a report on last week's draft Brexit transition deal, saying that the terms of agreement are credit positive, yet remains conditional on final conclusion of the withdrawal.
• The agreement reinforces Moody's view that the impact of Brexit will be manageable for rated UK corporate issuers, despite increased bureaucracy costs under an FTA.
• For UK banks the agreement is mildly positive to the extent that it reduces downside risks to growth and revenues.
• As far as the risk of a disorderly withdrawal is somewhat mitigated, the agreement reinforces Moody's central scenario of gradually moderating growth in the UK.
• Uncertainty concerning the terms of UK's future long-term relationship with the EU will prevail until a conclusive final agreement is reached.
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