The United Kingdom has lost its credit rating from two top rating agencies Standard & Poor’s and Fitch on Monday, as people are concern about the country’s economy after the referendum vote to leave the European Union.
Standard & Poor’s Global Ratings downgraded the nation by two notches to “AA” from “AAA”. S&P not only worries about the economic integrity after the referendum outcome, but also expressed concern that the votes to remain within the EU from Scotland and Northern Ireland create “wider constitutional issues for the country as a whole.”
“In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the U.K. We have reassessed our view of the U.K.’s institutional assessment and now no longer consider it a strength in our assessment of the rating,” the ratings agency said in a news release.
Fitch, meanwhile, also cut the nation’s rating by one notch to “AA” from “AA+”, signing the uncertainty of U.K.’s economic outlook after the nation voted to leave the European Union.
“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 said.
Fitch also revised down its projection of U.K.’s real GDP growth to 1.6% from 1.9% in 2016. For 2017 and 2018, the rating agency projects growth of 0.9%, down from its previous forecast of 2%.