S&P and Fitch downgrade UK credit rating

UK-Great-Britain-Bunting-700x450.jpgS&P has removed the UK’s AAA credit rating following the country’s vote to back Brexit, with Fitch also cutting its UK rating.

S&P last night downgraded the top rating for the UK, saying that the vote to Brexit could mean “a deterioration of the UK’s economic performance, including its large financial services sector”.

The ratings agency added that the vote to Leave would “weaken the predictability, stability, and effectiveness of policymaking in the UK”.

Fitch also cut the UK’s rating, from AA+ to AA, saying there will be an “abrupt slowdown” in growth over the short term.

A statement from the agency says: “Fitch believes that uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment.”

Fitch has also revised down its forecast for GDP growth, to 1.6 per cent from 1.9 per cent for this year. It now predicts 0.9 per cent growth in 2017 and 2018, down from 2 per cent for both years previously.

Ratings agencies had already warned of a downgrade after the vote last week. On Friday S&P chief ratings officer Moritz Kraemer said that the AAA rating was “untenable”.

The same day, Moody’s cut the UK’s credit rating outlook to negative and Fitch said Brexit would be “credit negative for most sectors in the UK”.