Commentary from Mark Melatos
"As a result of the inconclusive federal election outcome, there is some talk that Australia's AAA credit rating may be under threat. While it is not possible to predict what the credit ratings agencies might do, three things should be kept in mind:
1.In the post-GFC
As a result of the UK’s Brexit vote, Standard & Poors, Fitch and Moodys have now all downgraded (or placed on negative watch) the UK’s credit ratings.
In ordinary times, these downgrades would have significant negative implications for the UK economy by raising the UK government’s cost of borrowing
• Article 50 (the EU’s ‘divorce rule’) is emerging as a crucial strategic bargaining chip in the UK’s Brexit negotiations with the EU. An Article 50 divorce can, in theory, only be initiated by the exiting member which then has 2 years to conclude negotiations.