UK economy hit hard by Brexit – country's credit rating downgraded | Foreign

Moody's has downgraded the UK's credit rating, or the country's ability to repay its debts.

The institute downgraded the country's credit rating from Aa2 to Aa3, the fourth-best credit rating category. Moody's had previously described the UK's new credit rating as negative, but the rating has now been changed to stable.

The UK now ranks on the same level as countries such as Belgium and the Czech Republic. At level Aa2 are countries such as Saudi Arabia and South Korea.

According to the latest Moody's survey, Finland's credit rating is stable and the country places itself in the second-best credit rating category, Aa1. However, this assessment was made four years ago.

Negotiations on a trade agreement with the European Union are stalled.

According to the institute, economic growth in Great Britain was much weaker than expected. The situation was exacerbated by Brexit and the coronavirus pandemic also had a certain impact on the country's economy.

The UK government's unclear budget plans have also affected the economy and creditworthiness, according to the credit rating agency.

According to Moody's, UK economic growth is also likely to be weaker in the future.

Failure to reach a trade deal with the EU would cause long-term damage, Modi wrote in his report.

Prime Minister Boris Johnson said on Friday that Britain must prepare for no trade deal unless the European Union is prepared to change course and meet with Britain.

– Even if the two sides reach a trade deal before the end of 2020, it is likely to be narrow in scope. Modi points out that Brexit will continue to drag down private investment and economic growth.

Sources: Reuters, AFP