The UK’s economic outlook has been lowered to “negative” by ratings agency Moody’s due to political instability and high inflation. Moody’s changed the UK’s outlook – which is a marker of how likely it is to pay back debts – from “stable”.
Rating agencies, in essence, rate a country on the strength of its economy.
Moody’s along with another of the big credit rating agencies Standard & Poor’s (S&P) maintained their assessments of the UK’s credit rating.
Rating agencies give governments (or large companies) a score on how likely they are to pay back their debt.
The rating affects how much it costs governments to borrow money in the international financial markets. In theory, a high credit rating means a lower interest rate (and vice versa). These range from a top mark of “AAA”, which stands for “prime”, down to the lowest reading of “D”, which stands for “in default”.
Moody’s said there were “risks to the UK’s debt affordability”, but kept its rating of Aa3, the fourth-highest level on its scale.
Credit: bbc.com
