As you probably know, on June 23, 2016, the United Kingdom held the so-called Brexit referendum to decide whether the folks want to stay in the European Union. As the result, they decided to quit the EU. So, the Brexit scenario is underway and is already affecting Great Britain’s economic prospects.
Apart from the fact that the British Pound started losing is value against the U.S. Dollar and other major currencies, investors started withdrawing funds form toxic British assets, which only accelerated to trend.
Now it is reported that Fitch, a major international rating agency, decided to cut the United Kingdom’s long-term credit ratings in British and foreign currencies from «АА+» down to «АА», with a negative forecast. The thing is that Fitch expect the Brexit to escalate the existing uncertainty in financial markets in the U.K. and outside and is definitely going to affect the British economic growth by slowing it down in the coming years.
At the same time, S&P Global Ratings also decided to cut the United Kingdom’s long-term credit ratings in British and foreign currencies from «ААA» down to «АА», with a negative forecast. The rating agency also explains that the Brexit is the key reason for this decision. More over, the rating agency also cut the long term ratings of the Bank of England. In particular, the central bank got its ratings cut from «ААA» down to «АА».
They say that Brexit makes it more difficult for the United Kingdom to be predictable and efficient in making important economic and financial decisions today. The Brexit is going to affect the entire economy, including the national GDP and budget balance as well as the national currency, which is the British Pound, Masterforex-V academy experts say.
Another thing to pay attention to is that a big difference between the voting results in England, Wales, Scotland and Northern Ireland are expected to create even bigger constitutional problems for the United Kingdom. That’s why the British Pound has weakened a lot against the U.S. Dollar and other majors since the referendum results were announced.
