Moody’s credit ratings have reduced its expectations for the British economy from “stable” to “negative”, in light of political instability and high inflation in the country.
The agency explained the shift in expectations as a result of its inability to foresee the process of formulating policies in the context of poor growth prospects and high inflation rates, as well as the risks associated with the capacity to bear debt from potential high borrowing and the risk of persistent erosion of political credibility.
To assess a state’s capacity to repay debts, classification agencies base their assessments on the health of its economy.
However, Moody’s and other significant agencies like “Standard & Poor’s” continued to use the British credit scale.
The categorizations have an impact on how much it costs the government to borrow money on global financial markets. Theoretically, this indicates that low benefits correspond to high classifications and vice versa.
source: media in Britain.
Britain’s economic prospects are downgraded by Moody’s from “stable” to “negative.”
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