Moody’s Sees ‘Clear Downside Risks’ If UK Leaves EU

Ratings agency Moody’s said on Tuesday it saw “clear downside risks” if Britain votes to leave the European Union in a referendum in June, and repeated its warning that this would make the country’s debt more vulnerable to a downgrade.

Moody’s concerns come alongside a report from consultants Oxford Economics which estimated that Britain’s economy could be almost 4 percent smaller than otherwise if it curbed inward migration after leaving the bloc.

Prime Minister David Cameron wants Britons to endorse continued membership of the 28-nation bloc in a referendum in three months’ time, but both his Conservative Party and public opinion are deeply divided.

Moody’s currently rates British government debt one notch below triple-A with a stable outlook, but said voting to leave the EU could lead to a negative outlook.

Reuters

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.