LONDON (Reuters) -European rating agency Scope has said that the shutdown of the U.S. government is another negative for the country's downgrade-threatened credit score.
Scope, which currently rates the U.S. 'AA' with a 'negative outlook', said it showed deepening political polarisation in the world's largest economy and also comes amid mounting worries about President Donald Trump's attacks on the Federal Reserve.
"The administration’s increasingly unconventional policy approach has placed pressure on the long-standing checks and balances of the U.S. governance system and are seen as credit negative for the U.S. sovereign rating," Scope analyst Eiko Sievert said.
He added that the risk of a U.S. default due to political disputes remained unlikely, but was continuing to increase and would have "a significant impact if it occurred".
Scope tends to face less scrutiny from the U.S. than the so-called "big 3" rating firms - S&P Global, Fitch and Moody's - which became the last to strip the U.S. of its prized triple-A rating earlier this year.
Sievert said that the deeper U.S. political divisions become, the greater the risk that key policy compromises are not reached by the relevant debt limit deadlines.
Despite a $5 trillion increase in the debt ceiling agreed as part of Trump's "Big Beautiful Bill" this year, a further increase is likely to be needed by 2028, Sievert added, given the current "weak fiscal outlook".
Scope sees Washington's budget deficit staying around 6% and the U.S. debt-to-GDP ratio rising to 127% in the next five years.
(Reporting by Marc Jones; Editing by Hugh Lawson)