Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly-rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the United Kingdom (AA/Negative; S-1+/Stable) on 13 January 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated ratings history can be found on www.scoperatings.com.

Key rating factors

The United Kingdom’s long-term ratings of AA are underpinned by the following credit strengths: i) a wealthy and diversified economy; ii) institutional strengths including strong financial supervision, economic and monetary frameworks; iii) a favourable public-debt structure; iv) deep capital markets and enhanced financial-system buffers; and v) the sterling’s reserve-currency status alongside an independent monetary policy under the Bank of England. These factors increase the country’s resilience to economic and financial-system shocks. Challenges relate to: i) the significant weakening in the economic and fiscal outlooks, including permanently higher and still-increasing public-debt ratios, due to the Covid-19 crisis and associated anticipated double-dip contraction; ii) the ongoing economic and institutional costs associated with Brexit, despite a trading arrangement with the EU having been agreed at end-2020; iii) weak external sector; and iv) low productivity growth.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Dennis Shen, Director.
The final ratings were first released by Scope in January 2003.

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