David Davis responds to Moody’s threat to downgrade the UK following Brexit

Today Moody’s, the credit rating agency, declared that, “a decision to leave the EU would be credit negative for the UK economy.”

Moody’s also warned that in the event of Brexit they would consider, “assigning a negative outlook to the sovereign’s Aa1 rating.”

In response Sir David Davis said:

“Moody’s appears to have an adolescent unwillingness to confront conventional wisdom.

This is the company that failed to predict the biggest banking crisis of modern times, and that downgraded the UK’s credit rating in the face of sensible fiscal consolidation.

Moody’s has given us a litany of bad predictions in recent times, and has just provided us with another.

They are concerned that in the event of Brexit, the UK’s exports would suffer unless, “the UK managed to negotiate a new trade arrangement with the EU that preserves at least some of the trade benefits of EU membership.”

The fact is that we currently import £59 billion more from Europe than we export. After Brexit we would be Europe’s largest export market, worth £289 billion in 2014, larger than China.

We are too valuable a market for Europe to shut off. Within minutes of a vote for Brexit the CEO’s of Mercedes, BMW, VW and Audi will be knocking down Chancellor Merkel’s door, together with the leaders of Europe’s other key industries, demanding that there be no barriers to European access to the British market.

The pressure from European companies for a free trade deal between the UK and the remaining members of the European Union would be huge.

And if it is trade deals Moody’s are looking for then we can negotiate such deals far more quickly outside of the EU, and far more in our interest than the EU currently does on our behalf.

So Moody’s prediction that the economic costs of Britain leaving the EU would outweigh the benefits looks to be as inaccurate as we have come to expect from the ratings agencies.”