An increasingly antagonistic global political environment is exacerbating the gradual growth slowdown, weakening institutional strength and raising the risk of economic or financial shocks. Rising event risk renders the global environment less predictable for the 142 sovereigns we rate, and raises the possibility of reversals in capital flows that would hit the weakest sovereigns hardest. Watch the video.

Though the UK’s population is ageing more slowly than its EU peers, the country’s healthcare burdens and adult social care spending will quickly rise. However, certain UK private sectors will benefit from the growing number of adults over 65. Seniors spend heavily on healthcare, banks will compete for older customers and the growing ranks of seniors will affect the housing market and its regulation.

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The UK government’s institutional strength has weakened, as illustrated by the increasing inertia and, at times, paralysis that has characterised Brexit-era policymaking. The UK’s debt burden is high and unlikely to fall, given growing pressures for spending increases, with little clarity on how they might be financed. Brexit-related uncertainty has led to slower growth in business investment, which weighs on growth rates.