World Economy

UK Faces Rating Risk

UK Faces  Rating RiskUK Faces  Rating Risk

Ratings agency Moody’s said the election victory of Prime Minister David Cameron might have implications for the Britain’s sovereign debt rating if it led to the country leaving the European Union, RTE reported. Cameron has promised to hold a referendum on Britain’s membership of the EU before the end of 2017. “While the election result will have no impact on the UK’s rating, if the Conservative Party’s plan to hold a referendum on European Union membership results in the UK’s exit this could have consequences for the whole economy, including potentially for the sovereign rating, if the UK was unable to broadly replicate the benefits of membership,” Moody’s said. Meanwhile, Britain’s stock market surged higher today after David Cameron’s Conservatives unexpectedly won the election, giving the party another five years in power. The blue-chip FTSE 100 index closed 2.3% higher after the result to stand at 7,047, within touching distance of the record high of 7,122.74 points reached last month.