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Moody’s downgrades UK credit rating to Aa3 from Aa2, outlook stable

Moody’s cuts the United Kingdom

Boris Johnson
This isn’t entirely unexpected but you hate to see it. Fitch recently affirmed the UK at AA-, which is the equivalent of Aa3. S&P remains one notch higher at AA but it’s under review.
Moody’s cited three reasons for the sovereign downgrade:

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UK PM Johnson: We do think masks have a great deal of value in confined spaces

Comments by UK prime minister, Boris Johnson

Boris Johnson
  • We have got the virus under control across the country
  • It is very important to wear a face covering in shops
  • Will look at the guidance and say more in the next few days
Judging by recent remarks by the government, it is only a matter of time now before masks are surely going to be mandatory in shops across the UK.
In the US, Trump also wore a mask in public over the weekend but we’ll see if he will start doing so outside of the hospital. If so, that could mark a change of a stance and may help to create more health awareness in mitigating the spread of the virus.

UK PM Johnson announces lock down effort in response to coronavirus threat

A pre-recorded speech from UK Prime Minister Johnson being broadcast now

  • coronavirus is the biggest threat UK has faced for decades
  •  “Without huge national effort to halt the growth of this virus, there’ll come a moment when no health service in the world could possibly cope; because there won’t be enough ventilators, enough intensive care beds, enough doctors, enough nurses”
Says people should remain at home, only go out for essentials, medical reasons
  • critical thing is to stop the disease spreading between households
  • people will only be allowed to shop for basic necessities
  • people only allowed one form of exercise a day alone or with members of your household
  • people allowed out for any medical need, or to provide care or to help a vulnerable person
  • people can travel to and from work, but only where this is absolutely necessary and cannot be done from home
  • people should not be meeting friends or family who live outside their home
  • police will have the powers to enforce rules, including through fines and dispersing gatherings

Without a huge national effort, will come a moment when no health service in the world could possibly cope

  • says if too many people become seriously unwell at one time, the health service will be unable to handle it

More:

  • closing immediately all shops selling non-essential goods,​including clothing and electronic stores and other premises including libraries, playgrounds and outdoor gyms, and places of worship
  • will stop all gathering of more than two people, except people you live with
  • we’ll stop all social events​, including weddings, baptisms and other ceremonies, but excluding funerals
  •  restrictions will be kept under constant review
  • we will look again at restrictions in three weeks
  • we will relax restrictions if the evidence shows we are able to
  •  says the way ahead is hard, and it is still true that many lives will sadly be lost

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Is there still a possibility of a no-deal Brexit at this stage?

What if I told you that a no-deal Brexit now hinges on Boris Johnson winning the parliamentary vote tomorrow?

Boris Johnson
Before we get into the thick of things, let us set out what exactly is at stake tomorrow. Clearly, Boris Johnson’s Brexit deal motion is the main event but what does it mean really?

If lawmakers do vote to pass the motion, it means that they have technically voted in favour of a Brexit deal but there is still the issue of ratification and getting Johnson’s deal through the necessary legislative hoops – that includes voting on the withdrawal agreement.
The issue with all of this is related to the Benn Act. Now, the Benn Act requires Johnson to request an extension if Johnson cannot get parliament to agree on a Brexit deal. Hence, if the deal is rejected tomorrow, then there is no issue.
However, if the deal is approved, this is where things may yet get a little tricky.
In such an event, Johnson isn’t compelled to seek an extension and if there are hurdles he cannot overcome in getting his deal to be ratified and implemented, he could just let things run its course and we get towards a no-deal Brexit after 31 October.
Logically, you would think that he would seek a technical extension to get a deal through but possibly and certainly are two different words with very distinct connotations.
He could possibly seek an extension to work out any potential legislative issues and buy enough time to get his deal over the line legally but it doesn’t mean that he will certainly do so.

Is there any way to avoid this altogether?

This is where the vote on the Letwin amendment tomorrow may be rather consequential.
The Letwin amendment sets out that the government is to request an extension of the Brexit deadline, if a deal is passed, up until all the necessary legislative hurdles are overcome to officially put such a deal into place.
In essence, it is an added insurance in case Johnson has other plans up his sleeve.
This means that even if Johnson’s vote passes tomorrow but fails to get through any potential legislative complications by 31 October, he will still be compelled to request for an extension to the Brexit deadline.
While the drama involved in all of this is certainly captivating, it must be said that if we do see Johnson’s deal being passed tomorrow, it is pretty much a given that it should make it through all the significant legislative hurdles and be ratified in due time.
The timeline may now say it should be done by 31 October (two weeks) and that certainly could be plausible if lawmakers decide to work overtime.
That said, even if that isn’t enough time, a technical extension just to get the deal implemented is almost surely the most likely outcome – barring any unforeseen circumstances.

Here is UK PM Johnson’s cunning plan to stop Brexit extension beyond October 31

Earlier post on the UK media report on Prime Minister Boris Johnson plan to sabotage Brexit extension

  • UK press reports on UK PM’s plan to sabotage any Brexit extension
The background to this is Parliament have voted to require the PM to request an extension from the EU beyond October 31 (conditions apply but that’s the gist of it). Johnson plans to send an accompanying letter saying the UK government does not want the extension, that is it wants an exit on October 31.
Also, more from the weekend here:
  • EU officials adamant on no further Brexit extension
Earlier post on the UK media report on Prime Minister Boris Johnson plan to sabotage Brexit extension