KBRA Europe (KBRA) downgrades the long-term issuer ratings of the United Kingdom of Great Britain and Northern Ireland (UK) to AA from AA+. KBRA also affirms the short-term issuer ratings of the sovereign at K1+. The Outlook on the long-term ratings has been revised to Stable from Negative, following the downgrade.

The downgrade of the UK’s long-term credit ratings reflects its relatively high sensitivity to above-target inflation due to the structure of its economy and Brexit effects. Brexit related uncertainties continue to hamper economic performance. Fiscal and monetary headwinds persist, and these will likely challenge underlying credit metrics. Political uncertainty also compounds these issues, mainly with regard to the future relationship with the European Union. The Outlook on the UK’s long-term ratings has been revised to Stable from Negative, following the downgrade. The Stable Outlook reflects the credit strengths inherent in the UK’s large, advanced and resilient economy and its strong financing flexibility.

Click here to view the report. To access ratings and relevant documents, click here.

Ratings are based on KBRA’s Sovereigns Rating Methodology, published 20 December 2021 and utilise the ESG Global Rating Methodology, published 16 June 2021.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA Europe

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.

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