"The cost of Brexit would outweigh the benefits, the credit ratings agency Moody’s has warned. And it says Britain could have its credit rating lowered, leading to higher borrowing costs for the government, if it votes to leave the EU. Here is the Press Association story.
The economic costs of a decision to quit the European Union would outweigh the benefits, credit ratings agency Moody’s has warned.
A Brexit could have a negative effect on the UK’s credit rating, potentially pushing up the cost of Government borrowing, and may lead to a “prolonged period of uncertainty”, Moody’s said.
The agency welcomed the announcement of the June 23 vote as a way of addressing the issue quickly but said the result was “too close to call”.
“We consider it positive that the referendum will take place as soon as June, as a lengthy period of uncertainty on the part of firms and investors would damage the UK’s economic growth prospects,” senior vice president Kathrin Muehlbronner said.
“That said, the outcome of the referendum remains wide open. In our view, a decision to leave the EU would be credit negative for the UK economy.”
The firm said “the economic costs of a decision to leave the EU would outweigh the economic benefits” and “unless the UK managed to negotiate a new trade arrangement with the EU that preserves at least some of the trade benefits of EU membership, the UK’s exports would suffer”.
A vote to leave “would likely lead to a prolonged period of uncertainty, which would negatively affect investment”, Moody’s warned.
The firm said it would assign a “negative outlook” to the UK’s current Aa1 rating following a vote to exit.
Asked for the PM’s response to the warning from Moody’s, David Cameron’s official spokeswoman said: “The prime minister has been very clear of the risks of uncertainty of a vote to leave, and that a vote to remain is in the interests of both our economic and national security.”"
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