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Brexit could reduce Transport for London's income, credit ratings agency claims

Published 09/05/2016

TfL would be hit by a decrease in passengers as a result of fewer EU nationals living and working in London, Moody's claims
TfL would be hit by a decrease in passengers as a result of fewer EU nationals living and working in London, Moody's claims

Universities and Transport for London (TfL) are among the public sector bodies that have the most to lose from Brexit, according to a report from credit ratings agency Moody's.

It warned that UK universities' "significant EU research funding" would be uncertain following a vote to leave, while fewer EU students would choose to study in Britain.

TfL would be hit by a decrease in passengers as a result of fewer EU nationals living and working in London, depleting the transport provider's fare take.

Jennifer Wong, senior analyst at Moody's, said: "UK public sector entities receive various forms of EU funding, including research funding for universities and structural and investment funds for local authorities.

"The public sector also benefits from European Investment Bank (EIB) lending. The future of these funding sources would be uncertain following a vote to exit."

Across the board, a UK vote to leave would see a "negative impact" on public services, Moody's said. Slower economic growth could sting local authority funding, and housing associations could be hit by the resulting higher unemployment and rent arrears.

Moody's also reiterated its view that Brexit would lead to "heightened uncertainty" and slower economic growth in the UK, resulting in a possible downgrade to Britain's sovereign credit rating.

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