United Kingdom

Southern Water Ltd. was downgraded to junk status by Moody’s Ratings and warned it could be cut further in light of the woes facing UK water and sewage providers as well as the company’s own weak track record, Bloomberg News reported. The firm’s “history of material operational and financial underperformance” could continue over the coming five years and impact the potential raising of £4 billion ($5.1 billion) in new debt and at least £650 million of new equity, Moody’s said in a statement Wednesday.

Chancellor of the Exchequer Rachel Reeves believes the UK’s crackdown on banks in the wake of the global financial crisis has gone too far and vowed to give the country’s watchdogs new marching orders to ensure they’re focused on growing the economy, Bloomberg News reported. Regulators have spent much of the last decade trying to eliminate risk taking, which has hindered growth across the country, Reeves said in prepared remarks for her inaugural Mansion House speech to the City of London on Thursday. “The UK has been regulating for risk, but not regulating for growth,” Reeves said.

Thames Water won crucial support from creditors to move forward with its plan to raise £3 billion ($3.8 billion) in emergency funding, Bloomberg News reported. Holders of more than three-quarters of the beleaguered utility’s senior, Class A debt agreed to the proposal, according to a statement from the company on Wednesday. The fresh money, starting with an initial tranche of £1.5 billion, comes with an annual interest rate of 9.75%.

Britain's finance sector is counting on policymakers to deliver a rulebook revamp that prioritises growth and stops business slipping away to global rivals, amid fresh challenges to London's financial superpower status, Reuters reported. U.K. finance minister Rachel Reeves is giving her first Mansion House speech to leaders of the City on Thursday and is expected to outline the role the left-leaning Labour government wants them to play to help increase national prosperity. Pressure is mounting after Trump vowed to "liberate" the U.S.

The UK’s Financial Conduct Authority has been questioning top private credit managers about how they assess the worth of their investments as concerns mount about loans not being effectively valued within the booming $1.7 trillion industry, Bloomberg News reported. The regulator is seeking to understand the oversight and governance over the different methodologies used by private credit lenders, according to people familiar with the matter. It plans to publish its interim findings by the end of the year, one of the people said, asking not to be named when relaying private discussions.

Company insolvencies are surging in the UK after the Labour government reduced tax breaks and increased levies for owners, Bloomberg News reported. At least 1,022 companies filed to shut down in the week ended Nov. 8, a rise of 64% from a year earlier, according to notices filed to the Gazette. That’s a potential headache for Chancellor of the Exchequer Rachel Reeves, who will try to turn the page on her budget of higher taxes with a speech to businesses this week that will champion economic growth and the importance of free trade.

Thames Water’s board is split over two competing deals from its lenders aimed at saving the UK’s biggest water supplier from going insolvent, The Guardian reported. Two classes of creditors, group A bondholders and group B bondholders, are offering high-interest £3bn rescue packages intended as a liquidity lifeline while the company burns through cash and seeks to restructure its debts. Thames is labouring under an unsustainable £15bn debt burden after years of paying hefty dividends as well as fines for pollution scandals.

NatWest Group Plc bought back £1 billion ($1.29 billion) of its shares from the UK government as the Treasury continues to sell down its stake in the lender, Bloomberg News reported. The off-market purchase of 262.6 million shares brought the Treasury’s voting rights in the lender to about 11.4% from about 14.2% previously, according to a statement. The transaction is the first time that NatWest has done two directed buybacks in a twelve-month period.

The Bank of England lowered its key interest rate, the first major central bank to move since Donald Trump’s election as U.S. president scrambled the outlook for the global economy, the Wall Street Journal reported. The BOE said Thursday it would reduce its key rate to 4.75% from 5%, its second cut in the past three meetings. The bank forecast that inflation will fall to its target in early 2027 after a short-lived rebound over the coming months. The decision was opposed by just one of its nine policymakers.