Top Stories

Fitch Likely To Downgrade AA Rating To UK Amid Brexit Uncertainty

Last Wednesday Fitch Ratings announced that it may alter the ‘AA’ debt rating of the United Kingdom, owing to the growing uncertainty regarding the negotiations, as to how UK plans to exit the economic bloc. According to Fitch, if the Brexit ends in a ‘no deal’, there will be immense losses, which might result with a disruption in the economic condition of the country. This holds strong in the near future.

Fitch also announced that along with a decrease in the ‘AA’ rating, they would also reduce the sovereign rating of UK. Prime Minister had conducted constructive discussions in Brussels, regarding the final plans for Brexit, where her aggressive strategies had undergone strain for defection from lawmakers. In US this announcement from Fitch was followed by a fall in the stock prices. The stock prices finally rested at $13051, which was 0.1% down.

The British Prime Minister is slowly running out of time as she rushes to get approval from lawmakers before the March 29 deadline. Fitch announced that for the withdrawal to gain agreement, the government is expected to extend its support. The Brexit outcome will affect the economic growth of the country. The figures from the fourth quarter of 2018 showed that the growth slowed down to 0.2% from 0.6%. The resultant real growth for the year stood at 1.4%.

Britain also faces a fear of recession if it leaves the EU with a ‘no deal’ policy. According to analysts, the magnitude of this recession might be as high as it was in the first few years of the 1990s. During that time the gross domestic product of Britain had fallen by almost 2%. According to Fitch, the UK is expected to avoid a ‘no deal’ policy, as the GDP growth is expected to pick up to 1.6% this year.

Tags
Show More

Colleen Vrooman

With a certification in Astronomy, Colleen Vrooman is the person that heads the Science department. She has a total experience of 6 years in this industry. Even though Colleen manages the department and trains the employees to write the Space-related news, she is forever ready to contribute for writing in spite of her busy schedule. While not working for ZMR Industry Journal, Colleen spends most part of her free time with her friends playing snookers and cleaning her stick.

Related Articles

Close