The political wrangling has forced two successive Conservative governments to ask the European Union to delay Brexit three times this year. It is now set for January 31.
Current Prime Minister Boris Johnson hopes the snap election next month will give him a majority in the House of Commons to allow him to ratify his exit terms and finally leave the EU.
“Over the longer term, institutional weakening may also impact the UK’s economic strength, through its effect on the investment climate and on the UK’s attractiveness to skilled and unskilled foreign labor,” Moody’s said.
“In recent years, we have already seen the negative impact this can have, and Moody’s expects this negative influence will likely endure as the exit process continues and uncertainties persist during the subsequent phase of trade negotiations with the EU and with other nations.”
Britain remains highly indebted and this was unlikely to change in the next three to four years, according to Moody’s.