Moody’s low expectations for British banks

The outlook for long-term deposits of Barclays and Santander in the UK changed from “stable” to “negative”, with the rating remaining at “A1”.

In the same vein, Moody’s also classified the unsecured debt of Barclays, HSBC UK, Lloyd’s Bank, Westminster National Bank and Santander UK as “negative”.

The decision comes a week after the rating agency downgraded the outlook for UK sovereign debt to “negative”, while keeping the rating at “Aa3”.

Moody’s indicated that the outlook for British banks could improve again if sovereign debt regains its “stable” rating.

Last week, Moody’s also downgraded the Bank of England’s view as a long-term source of domestic and foreign currency, given the “unpredictability of policymaking” in the UK, weak growth prospects and high inflation.

He said “evolving policy decisions and the UK government’s ability to build confidence in its commitment to maintaining fiscal prudence” would be key to Moody’s UK’s future rating decisions.

PE // MSF

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