Moody’s: UK economy to slow to 1% GDP growth this year

Moody’s Investors Service, the US-based rating agency, made some comments on the UK economic outlook amid looming Hard Brexit risks and Bank of England’s (BOE) rate cut calls.

Key Quotes:

Expects UK economy to slow to 1% GDP growth this year.

House price inflation will be flat, at ~0.8% for several years.

Brexit challenges will continue to erode consumer confidence.

That will also dampen housing activity in the UK.

UK credit quality of new securitizations and covered bonds to be stable amid Brexit challenges.

The Credit quality of new securitizations and covered bonds in the UK will be stable in 2020 amid low unemployment and interest rates.

FX Implications:

The GBP/USD pair is under heavy selling pressure so far this Monday, as the sentiment around the pound remains undermined by downbeat UK fundamentals and uncertainty on the EU-UK trade front.

At the spot time, the cable trades near daily lows of 1.2966, down 0.32% on the day. The above report is only likely to exacerbate the pain in the British currency.