LONDON Ratings agency Moody's said Britain's inconclusive election result is likely to delay negotiations about the country's exit from the European Union which could be negative for Britain's credit rating.
Furthermore, Britain might slow its push to lower the budget deficit which would be a lower priority for the government, another negative for the rating.
However, the government might now consider Brexit options which represent less of a hard break from the EU which could be credit positive, Moody's said.
"While it is unclear at this stage which changes to its strategy the government will contemplate, it may be that 'softer' versions of Brexit will now be considered. This could potentially include a request to remain inside the EU single market or the customs union," Moody's said.
Moody's ranks the UK one notch above the other two main ratings agencies at Aa1.
(Writing by William Schomberg; editing by Costas Pitas)