S&P cuts United Kingdom sovereign credit rating to ‘AA’ from ‘AAA’

Standard & Poor’s on Monday downgraded the United Kingdom’s sovereign credit rating by two notches, from “AAA” to “AA,” citing last week’s referendum that approved a British exit from the European Union.”In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the U.K. We have reassessed our view of the U.K.’s institutional assessment and now no longer consider it a strength in our assessment of the rating,” the ratings agency said in a news release.S&P also expressed concern that wide-margin votes to remain within the EU from Scotland and Northern Ireland create “wider constitutional issues for the country as a whole.”The ratings agency said its downgrade notes the risk of a “marked deterioration of external financing conditions in light of the U.K.’s extremely elevated level of gross external financing requirements.”

Source: S&P cuts United Kingdom sovereign credit rating to ‘AA’ from ‘AAA’

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