Ratings agency S&P affirmed the United Kingdom rating at "AA/A-1+", but the outlook remains negative because of Brexit uncertainties. Also, S&P states that current outlook reflects institutional, economic uncertainty surrounding Brexit negotiations and what arrangements will emerge post-departure.
Key headlines (via Reuters):
- See heightened risks of deterioration in external financing conditions in light of the U.K.'s high gross external financing requirements
- Leaving the EU will also significantly diminish the U.K.’s capacity to influence EU policy on key sectors of the U.K. economy
- Also think Brexit could create challenging constitutional issues if it results in a second referendum on Scottish independence
- Brexit could also, over time, diminish sterling’s role as a global reserve currency
- Still view U.K.’s high external deficit as a vulnerability, and view an EU departure as a risk to financing sources
- UK-take the view that Scottish national party will push for another referendum on Scottish independence
- UK-given Brexit uncertainties and the likely fall in investment, forecasting a slowdown in 2017-2019
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