The ultimate outcome of negotiations between the UK and the EU remains highly uncertain - Moody's

According to a report by Moody's Investors Service, the credit implications of the UK's withdrawal from the European Union are likely to remain modest and manageable for most UK issuers.

Key highlights

"The UK and the EU will eventually come to an agreement that broadly mimics most — but not all — of current trading and regulatory arrangements, as they try to avoid disruption to trade and capital flows given their deep economic and financial ties."

"However, there are downside risks to Moody's central scenario, including the possibility that no new or temporary arrangements are in place before the end of the two-year period stipulated for withdrawal talks, or if negotiations were to break down. Such scenarios would be particularly credit negative for sectors and issuers exposed to greater costs of cross-border business activities that include, but are not limited to, tariffs, or those reliant on wholesale funding markets."

"We continue to believe that the credit implications of Brexit will be modest and manageable for most UK-based issuers," said Colin Ellis, Moody's Chief Credit Officer for EMEA and co-author of the report. "It is important to note that the ultimate outcome of negotiations between the UK and the EU remains highly uncertain, although visibility should increase over time," Mr Ellis added."