Moody's downgrades UK outlook to 'negative' amid political turmoil

Outlook on BoE also negative

Credit ratings agency Moody’s has downgraded the outlook for the UK government and the Bank of England from ‘stable’ to ‘negative’ amid the political and economic turmoil in the wake of the Mini Budget.

Moody's said the change in outlook was driven by "heightened unpredictability in policymaking amid weaker growth prospects and high inflation" and "risks to the UK's debt affordability from likely higher borrowing and risk of a sustained weakening in policy credibility". The agency noted that the Mini Budget, together with the subsequent reversal of most of the measures announced and the forthcoming change in prime minister, is a "continuing reflection of the weakening predictability of fiscal policymaking" seen in previous years. The report said: "Overall, the episode illustrates the...