S&P: No-deal Brexit could threaten UK credit rating
A no-deal Brexit outcome could impede the UK’s economic recovery, which could exert downward pressure on its sovereign credit rating, S&P Global Ratings said in its note published on City AM.
Key takeaways
“The "economic and political consequences" of failing to reach a trade agreement would be large. The two sides will therefore reach a deal.”
"A no-deal scenario would have important implications for the UK economy, the country's ability to attract inflows of capital and labor over time, and its public and external finances.”
"Our sovereign ratings on the UK could come under downward pressure if the economic recovery is significantly weaker than we anticipate, making fiscal consolidation more challenging."
“Lower growth resulting from a no-deal Brexit could have a negative effect on the debt-to-GDP ratio.”
“A "prolonged" loss of access to EU markets for merchandise and services exporters would be damaging.”
“The rating could also be threatened if foreign investors' appetite for the pound or UK assets falls.”
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Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
