Moody's: UK's creditworthiness under pressure from Brexit-related uncertainty

"The United Kingdom's creditworthiness is under pressure following the vote to leave the European Union and the ongoing uncertainty over the outcome of negotiations with the EU," Moody's Investors Service said in a recent report.

Key quotes:

• While the negotiations with the EU have recently started, it remains unclear whether the UK government can eventually deliver a reasonably good outcome for the UK
• Political and fiscal risks have increased following the government's loss of its parliamentary majority in early elections in June
• Moody's expects the UK economy to weaken significantly through the remainder of this year, with the baseline scenario seeing growth declining to 1.5% this year and 1.0% in 2018, compared to 1.8% in 2016
• The UK sovereign rating could be downgraded if the negotiations with the EU suggest that the government might not be able to preserve core elements of the UK's current access to the EU Single Market
• The outlook could be returned to stable if a trade arrangement with the EU is reached that would limit the economic impact from exit