Ratings agency Moody’s has warned of a negative impact on the UK economy in the wake of the inconclusive election result, adding that it is likely to complicate and delay impending Brexit negotiations.
In a report published on Monday, Moody’s said the result was also bad for the country’s credit rating.
“In our view, the budget deficit will increase this year and next as the Government reacts to the economic slowdown under way,” said Kathrin Muehlbronner, Moody’s senior vice president.
However, the agency added that the result had made a hard Brexit less likely, weakening Theresa May’s mandate to walk away from the EU with no deal as previously threatened.
The comments echo those of other rating agency Standard & Poor’s, who also commented on a negative impact on the UK’s credit rating.
“In terms of the outlook for growth, it’s clear that things are not going in the right direction,” S&P European chief economist Jean-Michel Six told the AJEF association of financial journalists in Paris.
“This latest bit of instability can only weaken the business environment and consumer confidence,” Six said, according to Reuters.
