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Brexit will NOT trigger recession and UK economy will grow, says Moody's ratings boss

Economy:
Brexit will NOT trigger recession and UK economy will grow, says Moody's ratings boss

BRITAIN'S decision to leave the EU will NOT trigger a recession, a top ratings agency has said.

Alastair Wilson, the head of the sovereign ratings at Moody's said Britain is "not looking at a recession," despite fear-mongering from other businesses in the City.

Moody's Investors Service had cut its outlook on UK sovereign debt but the ultimate outcome for the British economy may not be as bad as first thought.

Mr Wilson told CNBC: "The UK referendum result, which rocked global markets on Friday, is extremely significant for the UK and significant for the rest of Europe.

" It is bad for Europe. We do not yet know quite how bad; we will see that as we see elections coming, "he added.

Boris Johnson spoke this morning on a brighter future for Britain, maintaining that we would be able to keep a free trade agreement with the EU.

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Moody's reiterated the importance of the need to strike an agreement that would allow Britain to continue with its free-trade arrangements.

Mr Wilson said : "if it does not, we expect to see a reasonably significant short-term economic shock, but if it does, then the growth will come back."

Wilson forecast the UK economy would grow by around 1.5 per cent this year and close to 1 per cent in 2017. A prediction in contrast to Goldman Sachs, which warned the UK was likely to enter recession by early next year on Sunday.

"We are not looking at a recession," Wilson said.

"But what we will see, if the U.K. is not able to agree the kind of trading arrangements that it currently benefits from in the EU, is sustained and materially lower growth over the medium-term."

Mr Wilson also spoke of the threat of further disruption in Europe, pointing to the disquiet in Spain.

He said: "We have got forthcoming elections over the coming months and years in some of the major European states; we have got budgets to be agreed and we will see just how far this pushes incumbent parties away from their plans to consolidate their debt, "he said.

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28 June 2016, 9:07