Moody’s gives negative outlook for EU and UK, upgrades Lazio region

European and UK credit ratings face challenges next year, while Italy’s Lazio region receives a boost from Moody’s.

Moody’s has assigned a negative outlook to the European Union and the United Kingdom for 2026, citing a challenging geoeconomic context, political fragmentation, and structural economic pressures. The rating agency highlighted risks from China’s dominance in critical raw materials, ongoing trade frictions with the United States, and persistent geopolitical threats from Russia. “Political fragmentation across the region, with nine national elections scheduled for 2026, could further complicate fiscal consolidation and structural reforms,” the report notes.

In contrast, Italy’s Lazio region was upgraded from Baa3 to Baa2 with a stable outlook, reflecting solid operational performance, stable revenues, a leaner debt structure, and a high likelihood of state support if needed. This marks the second upgrade for Lazio in 2025, following the first in May when the outlook was raised from stable to positive.

Francesco Rocca, president of Lazio, said the upgrade confirms the region’s growing credibility on the international stage. “Moody’s recognition reflects not only financial management but also the Lazio region as an institution presenting itself with greater credibility internationally. This strengthens investor confidence and demonstrates that Lazio is becoming a reliable reference point,” Rocca said.

Giancarlo Righini, regional budget councillor, added that the upgrade rewards efforts to reduce debt, optimize spending, and restore the region’s credibility. “A sound and forward-looking financial management approach improves Lazio’s attractiveness and competitiveness, translating into more investments, opportunities for businesses, jobs for young people, and wealth for citizens,” he said.

This upgrade follows the Lombardy region’s rise from Baa2 to Baa1 with a stable outlook and comes after Italy’s sovereign rating was increased to Baa2.