Credit rating agency Moody's has slashed its outlook on the UK banking system from stable to negative, saying Brexit uncertainty has eroded the country's growth prospects. According to Moody's, the UK's economy is weakening, making it more susceptible to shocks. 'The operating environment for UK banks is deteriorating, weighing on their asset quality and profitability,' Moody's said in a report. 'Our base case is that the UK and the European Union will ultimately reach a free-trade agreement, but it is increasingly unlikely that any such deal will substantially mitigate the negative economic impact of Brexit.'