FILE PHOTO: The sun rises behind the Canary Wharf financial district in London, Britain, February 12, 2020.
LONDON: Britain will suffer the sharpest peak-to-trough economic slump of any major economy this year, rating agency Moody’s warned on Friday (Jul 10), while its debts as a share of GDP will surge by 24 percentage points.
Moody’s said the UK government’s latest stimulus package, announced this week, would aid a gradual economic recovery but add further pressure to the UK’s fiscal position.
“The UK’s public debt ratio will likely rise by 24 percentage points of GDP or more relative to 2019 levels,” a group of Moody’s top analysts wrote in a note.
“We forecast a contraction of 10.1 per cent in the UK’s GDP for this year, but expect a gradual subsequent recovery on the back of the easing in lockdown measures, with growth rebounding to 7.1 per cent next year”.
Moody’s rates Britain Aa2 with a negative outlook.
