Moody’s Investors Service MCO 0.30% downgraded the credit ratings of three banks in the U.K. following a cut to the nation’s sovereign debt rating last week. Moody’s cut the U.K. sovereign debt rating last week one notch to Aa3 with a stable outlook citing the nation’s weakening economic and fiscal strength. Moody’s also cited the U.K. government’s inability to reach a deal with the European Union when it cut the sovereign debt rating. The cut in the sovereign debt rating affects the ratings of banks because it may reduce the government’s ability to support lenders in case of need, Moody’s said Tuesday. “Such support in some cases no longer provides rating uplift given the lower U.K. sovereign debt rating,” Moody’s said.

Source: Wall Street Journal October 20, 2020 20:37 UTC