London-Sana
Moody's downgraded its outlook for the British economy to negative, due to political instability and high inflation in the country.
The BBC reported that Moody's changed Britain's rating from stable to negative, and the agency attributed the change in expectations to the unpredictability of the policymaking process, amid weak growth prospects and high inflation, in addition to the debt sustainability risks from potentially high borrowing.
Moody's said it "sees risks to Britain's ability to pay its debts", but maintained its AA 3 rating, the fourth highest in its rating scale.
As for Standard & Poor's, it maintained its AA rating for Britain, the highest in its rating scale, and maintained its future assessment, which it changed from stable to negative.
Britain is suffering a series of blows to its economy, which the Bank of England said may already be in a recession, and the rise in food prices pushed the annual inflation rate to 10.1 percent in September, bringing it back to its highest level in 40 years in July.
Liz Truss resigned as Prime Minister after a disastrous 6 weeks in office, as the mini-budget set by Truss and former finance minister Kwasi Quarting upended Britain's financial markets, and investors immediately rejected their plans for unfunded tax cuts, sending bond yields up. The government, the sinking of the pound sterling and forcing the Bank of England to make three consecutive interventions, to save the exhausted pension funds.
Rating agencies depend in their assessment on the strength of a country's economy, to determine its ability to repay debts, and ratings affect the cost that the government pays to borrow from international financial markets, and this means, in theory, that high ratings are offset by low benefits, and vice versa.
The agencies give every country in the world a specific rating, ranging from the highest credit score, which is AAA, to the lowest, which is D, which means that the country is unable to pay the debts.
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