New York’s Moody’s says UK economy to contract over 10% in 2020, debts to surge

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New York’s Moody’s says UK economy to contract over 10% in 2020, debts to surge

Late on Friday, the New York City-based global rating agency, Moody’s, often contemplated as one of the “big three” credit rating agencies alongside Fitch and S&P, had issued a statement saying that the UK economy, which had been nearing a drawdown due to the Brexit-related uncertainties even before the onset of the pandemic outbreak, would likely to take the hardest hit among all of the major economies across the globe.

Aside from that, raising a red flag over the UK economy, Moody’s had also warned at its statement that the pandemic-led economic slump would heave up United Kingdom’s national debt nearly 25 per cent of the country’s GDP (Gross Domestic Product) compared to the same time a year earlier.

£30 billion pound business rescue package to bring in alligators

On top of that, the New York City-based global rating agency had also added at its Friday’s statement that the latest stimulus package of £30 billion from the UK Government would likely to assist in a gradual recovery of the UK economy, however, the amount in fiscal aid would be marginalizing the UK economy’s fiscal position further.

Meanwhile, adding that the UK economy’s 2020 debt would likely to hit a record 109 per cent of the nation’s entire GDP (Gross Domestic Product), a group of Moody’s analysts wrote in a note on Friday, “The UK’s public debt ratio will likely rise by 24 percentage points of GDP or more relative to 2019 levels.

We forecast a contraction of 10.1% in the UK’s GDP for this year, but expect a gradual subsequent recovery on the back of the easing in lockdown measures, with growth rebounding to 7.1% next year. ” However, later on Friday, another New York City global rating agency, Fitch, said in a statement that the rating agency was expecting a contraction of 9 per cent for the UK economy adding that the £30 billion in rescue bill would likely to cost around £21 billion, largely because millions of UK workers who had been in a temporary leave would likely to be sacked by the year-end.