LONDON – Moody’s warned on Friday that it might cut its rating on Britain’s sovereign debt again, saying that neither of the main political parties in next month’s election was likely to tackle high borrowing levels which Brexit had made even harder to fix.
In a toughly worded statement, Moody’s said the fissures in Britain’s society and politics exposed by its still-unresolved decision to leave the European Union would be long-lasting.
“It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the UK will return once Brexit is no longer a contentious issue, however that is achieved,” the ratings agency said.
Moody’s said Britain’s £1.8 trillion ($2.30 trillion) of public debt – more than 80 percent of annual economic output – risked rising again and the economy could be “more susceptible to shocks than previously assumed.”
Both of the main political parties have promised big spending increases ahead of next month’s election.