Standard & Poor's Financial Services (S&P) has downgraded the long-term sovereign credit ratings on the UK by two notches to 'AA' from 'AAA', according to a recent statement.
Commenting on the UK’s vote to leave the European Union (EU), “In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK We have reassessed our view of the UK's institutional assessment and now no longer consider it a strength in our assessment of the rating.”
S&P’s downgrade reflected the risks of a marked deterioration of external financing conditions amid the UK’s extremely elevated level of gross external financing requirements, the report added.
“The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence,” according to the statement.
