Monday 27 June 2016 6:48 pm

S&P and Fitch downgrade UK after “seminal” Brexit vote

Standard and Poor's and Fitch downgraded the UK's credit rating on Monday evening after last week's Brexit vote.

S&P downgraded the UK's rating by two notches, from AAA to AA, with a negative outlook, describing the Brexit vote as "a seminal event".

Fitch also downgraded the UK, from AA+ to AA with a negative outlook. "The UK vote to leave the European Union in the referendum on 23 June will have a negative impact on the UK economy, public finances and political continuity," Fitch said in a statement.

Meanwhile, Sky News reported on Monday night that Moody’s has signalled to a number of the UK’s largest banks that it plans to revise down the outlook for their credit ratings to negative from positive or stable.

S&P 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.

"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 also noted that a Remain vote in the EU referendum in Scotland and Northern Ireland "creates wider constitutional issues for the country as a whole".

The agency 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."

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