LONDON (Reuters) - Mounting Brexit uncertainty pushed Britain’s Credit Default Swap (CDS) levels - a financial market insurance policy for government debt - to the highest since February on Friday.
The pound has slumped this week as no-deal Brexit jitters have increased and data from IHS Markit showed UK CDS had climbed 2 basis points to 36 basis points, while Ireland’s rose 3 basis points at 34 basis points.
New UK Prime Minister Boris Johnson saw his Conservative government’s working majority in parliament cut to just one overnight after it lost a local election to the pro-European Union Liberal Democrats.
Rating agency Moody’s meanwhile warned that Johnson’s spending pledges could cost at least 1.5% of GDP, and combined with the growing probability of a no-deal Brexit, further weaken the country’s sovereign credit profile.
Reporting by Marc Jones; editing by Thyagaraju Adinarayan