The political situation in the UK has clearly had a bit impact on the markets, and now the ratings agency Moody’s has lowered its outlook from “stable” to “negative”.
Rating agencies, in essence, rate a country on the strength of its economy.
It 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).
Moody’s said there were two “drivers” behind its decision to change the UK’s economic outlook.
It said the first was “the increased risk to the UK’s credit profile from the heightened unpredictability in policymaking amid a volatile domestic political landscape”.
The rating’s agency said it viewed the government’s mini-budget, the reversal of the majority of the policies in it, and the change in prime minister as a “continuing reflection of the weakening predictability of fiscal policymaking seen in previous years”.
Source: BBC