Ratings agencies downgrade UK credit rating after Brexit

The UK has lost its top AAA credit rating from ratings agency S&P following the country’s Brexit vote.

S&P said the the referendum result could lead to “a deterioration of the UK’s economic performance, including its large financial services sector”.

Rival agency Fitch lowered its rating from AA+ to AA, forecasting an “abrupt slowdown” in growth in the short-term.

The moves come after Chancellor George Osborne said the UK will face the future “from a position of strength”.

Speaking earlier, in an attempt to restore calm to the markets, the chancellor said the economy would need to “adjust” but was strong enough to cope.

S&P had been the only major agency to maintain a AAA rating for the UK.

On Friday, Moody’s cut the UK’s credit rating outlook to negative.

A rating downgrade can affect how much it costs governments to borrow money in the international financial markets. In theory, a high credit rating means a lower interest rate (and vice versa).

S&P said that the leave result would “weaken the predictability, stability, and effectiveness of policy making in the UK”.

source: BBC