Brexit is credit negative for UK – Moody’s

The United Kingdom’s (UK) decision to leave the European Union (EU) will lead to a prolonged period of uncertainty that will weigh on the country’s economic and financial performance and will be credit negative for the UK sovereign and other rated entities, Moody’s Investors Service said in a report published Friday. The immediate financial market reaction has been pronounced, with sterling depreciating sharply and global equity markets falling. Heightened uncertainty during negotiations over new arrangements between the UK and the EU will likely dent investment inflows and consumer and business confidence in the UK, weighing on its growth prospects. While Moody’s does not expect “Brexit” to have major credit implications for most EU-based issuers, the outcome of the nationwide June 23 referendum could increase the risk of political fragmentation within the EU if popular support for the bloc fades among member states. The report “UK Vote for EU Exit Signals [...]