US ratings agency out with a client note 18 July

  • If the UK and the European Union are unable to reach an agreement on the terms of the UK's withdrawal from the EU and future relationship, there could be significant macroeconomic disruption for the UK which would weigh on the credit quality of a range of UK issuers

  • under a 'no deal' scenario, the UK would likely see slower growth or outright recession, higher unemployment and higher inflation, which would be credit negative for a range of UK issuers. Restrictions on immigration may exacerbate skill shortages in certain sectors

  • a weaker economy would weigh on UK corporate credit metrics, with reduced demand weakening revenues and profitability. While the specific impact would vary sector by sector, companies reliant on just-in-time supply chains could be severely affected by increased border inspections.

The research is an update to the markets and does not constitute a rating action.

Full report here

Meanwhile GBPUSD currently 1.3026 still on the back foot after the UK inflation data fall but pausing for breath as EURGBP stalls at 0.8880 supply/res.

EURGBP