June 18, 2019 / 10:53 AM / 6 months ago

Two-notch UK rating cut 'outlier scenario', Fitch says

FILE PHOTO: The Canary Wharf financial district is seen from Greenwich Park in London, Britain, May 7, 2019. REUTERS/Hannah McKay/File Photo

(Reuters) - A two-notch credit rating downgrade for the United Kingdom is unlikely even in event of a no-deal Brexit outcome, a senior official at the Fitch agency said on Tuesday, describing it as an “outlier scenario.”

Others ratings agencies such as S&P Global have warned in the past that Britain would almost certainly be downgraded again, and possibly by two notches from its current double-A, if it tumbled out of the EU without a transition deal.

But Fitch managing director Tony Stringer, speaking on the sidelines of a conference, said: “This is an outlier scenario. Our analysis would need to suggest that the downside risks to the economy are severe.”

After three years of political deadlock over Brexit, the ruling Conservative Party is picking a new leader and hopes to have a new prime minister in place by the end of July. But with Brexiter Boris Johnson a front-runner for the role, investors are concerned Britain is on course for a no-deal divorce with the European Union.

Reporting by Dhara Ranasinghe and Tommy Wilkes; editing by Sujata Rao

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