Moody's warns UK of further debt downgrade on Brexit paralysis
LONDON (Reuters) - Moody's warned on Friday it might further cut its rating on Britain's sovereign debt, saying Brexit had eroded the country's ability to tackle the challenge of its high levels of borrowing. 'It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the UK will return once Brexit is no longer a contentious issue, however that is achieved,' the ratings agency said. Britain's lawmakers have been wrangling over the country's exit from the European Union for more than three years
LONDON (Reuters) - Moody's warned on Friday it might further cut its rating on Britain's sovereign debt, saying Brexit had eroded the country's ability to tackle the challenge of its high levels of borrowing.
"It would be optimistic to assume that the previously cohesive, predictable approach to legislation and policymaking in the UK will return once Brexit is no longer a contentious issue, however that is achieved," the ratings agency said.
Britain's lawmakers have been wrangling over the country's exit from the European Union for more than three years.
Prime Minister Boris Johnson has called a Dec. 12 election in an attempt to break the deadlock.
Moody's said the "increasing inertia and, at times, paralysis that has characterized the Brexit-era policymaking process" showed how the UK's institutional framework had diminished.
The decline in institutional strength appeared to be structural in nature, it said, and was likely to continue after Brexit, given what it said were deep divisions within society and the country's political landscape.
It also said the government, after taking steps to reduce Britain's budget deficit between 2010 and 2015, had been increasingly willing to "move the goalposts" on fiscal targets in recent years.
"Successive governments have announced large, permanent increases in public expenditures, most notably a large increase in spending on the National Health Service (NHS), outside the normal calendar for fiscal policy changes and without detailed policy plans," it said.
Both of the main political parties have promised big spending increases ahead of next month's election.
Moody's said the risk was that Britain's 1.8 trillion pounds of public debt - more than 80% of annual economic output - would begin to rise.
"In the current political climate, Moody's sees no meaningful pressure for debt-reducing fiscal policies," it said.
Moody's, which stripped the country of its AAA rating in 2013, well before the 2016 Brexit referendum, and downgraded it again in 2017, said on Friday it was affirming its Aa2 rating on Britain's sovereign debt.
(Reporting by Paul Sandle; Editing by Chris Reese and Bill Berkrot)
This story has not been edited by Firstpost staff and is generated by auto-feed.
U.S. home sales fall as tight supply boosts prices | Reuters
France, Germany to agree to NATO role against Islamic State - sources | Reuters
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
China's Xi says navy should become world class | Reuters
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.