LONDON (Sputnik) — US credit ratings agency Moody’s cut UK’s long-term issuer rating to Aa2 from Aa1 on Friday, citing economic uncertainty over the EU exit process, but changed the outlook to stable from negative.
"Fiscal pressures will be exacerbated by the erosion of the UK's medium-term economic strength that is likely to result from the manner of its departure from the European Union, and by the increasingly apparent challenges to policy-making given the complexity of Brexit negotiations," it said.
The agency said it was "no longer confident" that the UK government would secure a replacement free trade deal with the European Union, which "substantially mitigates the negative economic impact of Brexit."
The downgrade came hours after British Prime Minister Theresa May proposed to Brussels, during a speech in Italy, to keep existing trade terms for around two years after the cutoff date of March 2019 to avoid uncertainty.
