Moody's: Economic indicators suggest favorable macroeconomic conditions in the UK

Overall, economic indicators suggest the robust macroeconomic environment in the UK prevails at the beginning of 2017, Moody's Investors Service said in the second edition of its Brexit Monitor report today.

Key quotes

"The favourable macroeconomic conditions prevailing in the UK post-referendum support our central view of a 'modest and manageable' credit impact of Brexit for UK issuers," said Colin Ellis, Moody's Chief Credit Officer for EMEA and co-author of the report. "However, there are clear downside risks if negotiations fail."

"The next milestone in the UK's Brexit process is will be UK Prime Minister Theresa May's invoking of Article 50 of the Lisbon Treaty before the end of March, a move that formally announces the UK's intent to leave the EU. After amendments by the House of Lords were overturned in the Commons this week, the Brexit Bill will get Royal Assent on 16 March. This will allow the Prime Minister to notify the European Union of its withdrawal by the end of March."

"On 13 March, Scotland's First Minister Nicola Sturgeon, leader of the Scottish National Party (SNP), said she would seek the approval of the Scottish Parliament to request a second referendum. However, any legally binding referendum requires the consent of the UK government in Westminster."

"Moody's base case remains that a second Scottish independence vote is unlikely to be held prior to Brexit negotiations being largely completed."