UK loses top credit rating following Brexit vote

The UK has lost its its top AAA credit rating from Standard and Poor’s following the country’s vote to leave the European Union.

A statement from the rating agency said: “In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK.”

Standard and Poor’s demoted the UK’s rating from AAA to AA, because leaving the EU “reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency.”

The agency also highlighted that the potential referendums on independence for Scotland and Northern Ireland will be “risks to the constitutional and economic integrity of the UK.”

This downgrade comes after rival agency Fitch reduced its UK rating from AA+ to AA, on Monday.

A statement from Fitch read: “Fitch believes that uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment.

“Medium-term growth will also likely be weaker due to less favourable terms for exports to the EU, lower immigration and a reduction in foreign direct investment. An adjustment in the value of sterling and changes in the business environment could also affect growth.”

Standard and Poor’s was the last remaining agency to give the UK an “AAA” rating, therefore this is yet another significant blow to the country’s economic state following the EU referendum.