NEW YORK (AP) -- Moody's has downgraded its credit rating on Great Britain, citing the country's weakening finances and the impact of its decision to exit the European Union.
The agency on Friday said it was cutting its long-term debt rating on the UK one notch to Aa2, its third-highest investment-grade rating. Its outlook on the rating moved to "stable" from "negative."
Moody's said it expects Britain to see higher budget deficits as a result of political and social pressure to increase spending after years of cuts.
It also sees Brexit eroding the country's economic strength. Moody's forecasts the U.K. economy growing just 1 percent in 2018 after 1.5 percent growth this year, adding that it doesn't expect growth to recover to its historic trend rate in the coming years.