On Friday, the New York City-based global rating agency Moody’s, often contemplated as one of the “big three” rating agencies alongside Fitch and S&P, had slashed UK’s sovereign credit rating to “Aa3” from an earlier “Aa2,” as an upsized impact of the pandemic-driven fiscal slump, a likely no-deal Brexit by December 31 deadline alongside a lack of transparency in budget plans for the fiscal year 2020-21, appeared to be darkening the world’s sixth-largest economy’s outlook, putting it on the same page as Belgium and Czeck Republic.
In point of fact, latest move from Moody’s to slash the sovereign credit rating of United Kingdom came forth days after the UK Government of PM Johnson had revealed that its public debt had surpassed a record £2 trillion ($2.6 trillion), topping 100 per cent of Briton’s entire GDP (Gross Domestic Product).
Britain’s growth to remain weak as pandemic pain, Brexit dilemma sustain
Adding further strains, media headlines revealed later last month that the Britain’s economy had contracted by the most over the second quarter of the year among the group of G7 nations, while Moody’s was quoted saying in its Friday’s statement, “Britain’s growth had been meaningfully weaker than expected and is likely to remain so in the future.
Even if there is a trade deal between the UK and EU by the end of 2020, it will likely be narrow in scope”. Apart from that, while it appears that the UK economy is lacking the fundamental anchor to prevent further downside flip, the New York City-based global rating agency had also added at its statement that UK might have taken the weightiest header from the pandemic-led forced business closures, while Britain’s vast services sector had been battered by the social-distancing norms.
If truth is to be told, the downgrade has been a horrendous blow for PM Johnson who has already been under heavy fire due to his handling of the pandemic outbreak.