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11 November 2016

The Guardian: S&P predicts hard Brexit and fresh downgrade for UK


In a blunt assessment the ratings agency calls UK a deeply divided, diminishing economic power on verge of losing the right to freely export to the EU.

In a bleak assessment of the UK’s prospects following the EU referendum, Standard & Poor’s said Britain was a diminishing global economic power on the verge of losing the ability to freely export goods and services to the EU.

S&P said the UK was at risk of a further downgrade, following its unusual decision to slash the rating by two notches from the top AAA rating to AA, following the 23 June referendum.

Moritz Kraemer, S&P global ratings chief sovereign credit officer, described that downgrade as “an extraordinary rating action, underlining the unprecedented step that is Brexit”.

He added: “Far from healing festering wounds, as was then Prime Minister David Cameron’s intention, the referendum has deepened and laid bare the schisms in British society.

“Most of the economic impact will hit Britain itself. The second-round effect on the world economy is likely to be more limited, as the UK economy accounts for a small and shrinking share of global GDP.”

The agency cited data from the International Monetary Fund, which suggested the UK’s share of the world economy will shrink from about 5% in 1980 to just over 3% in 2020. [...]

Full article on The Guardian



© The Guardian


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