UK taken down a peg or two 28 June 2016London Reporter: Drew Nicol
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Rating agencies S&P and Fitch have downgraded the UK’s credit rating in response to last week’s decision to leave the EU.
Multiple ratings agencies made threatening noises immediately following close-run result but S&P was the first to cut the UK down two places, from its stellar AAA rating to AA, shortly followed by Fitch, which took the country to AA from AA+.
The decision to downgrade its credit rating came was in part due to UK Prime Minister David Cameron resigning immediately following the Brexit vote, without triggering the formal process to leave the economic and political union. His successor will also not be named until 2 September.
S&P had previously stated it had no immediate plans to review the UK’s rating when the result was first announced, but the rating agency changed its mind on 27 June.
The UK continues to be on ‘negative watch’ with Moody’s and Fitch.
Fitch also highlighted potential risk for Ireland’s credit rating due to the country’s association with the UK. Fitch upgraded Ireland to 'A' from 'A-' in February
“The UK vote to leave the EU is negative for Ireland, raising risks to growth and creating uncertainty around future relations with Northern Ireland," Fitch explained in a research note
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