UK Vote Raises Political, Brexit Uncertainties: Fitch

(RTTNews) - The UK general election result created uncertainty over the policy platform, political cohesion and longevity of the next UK government, Fitch Ratings said Friday.

This will have implications for Brexit as well as potentially fiscal policy, the agency said.

Fitch added that the political, economic and institutional uncertainty stemming from the June 2016 Brexit referendum and the upcoming UK-EU negotiations is reflected in the Negative Outlook on the 'AA' sovereign rating.

Prime Minister Theresa May will seek to form a government with support from Northern Ireland's Democratic Unionist Party. A hung parliament increases the range of possible Brexit outcomes, including a potentially "softer" deal and a disorderly exit, Fitch noted.

Elsewhere, Moody's Investors Service also said that the election result heightened uncertainty over Brexit negotiations. The strong electoral gains of the anti-austerity Labour Party mean that fiscal consolidation will have a lower priority and public debt will rise further.

The rating agency Standard & Poor's reportedly said that the credit rating will not be immediately affected by the election but cautioned that it could add uncertainty by potentially delaying Brexit negotiations.