S&P says Britain’s ‘AAA’ credit rating untenable

Britain's top-notch "AAA" credit rating is no longer tenable after voters opted to leave the European Union, Standard & Poor's said.

"We think that a AAA-rating is untenable under the circumstances," Moritz Kraemer, chief ratings officer for S&P, told the FT.

However, the agency said the Brexit poll outcome had no immediate impact on Ireland’s sovereign ratings.

Accordingly, S&P have confirmed that Ireland is rated as investment grade. S&P Global Ratings says there will be negative effects but feel that Ireland is resilient.

Speaking in Government Buildings Friday, the Minister for Finance, Michael Noonan said he welcomed the assessment.

“As I mentioned earlier today, the prudent economic and fiscal policies implemented over recent years have placed the State in a stronger position to weather economic shocks that may be caused by this result,” Mr Noonan said.

Rival agencies Fitch and Moodys have already stripped Britain of their AAA ratings, long before the referendum campaign began.

S&P has previously said its AAA rating for Britain reflected its assumption that the referendum would deliver a vote to remain in the EU.

Moody’s ratings agency said on Friday that Britain’s vote to leave the European Union was “credit negative” for Britain’s sovereign ratings and for other issuers in the country.

“This outcome heralds a prolonged period of policy uncertainty that will weigh on the UK’s economic and financial performance,” it said in a statement.

“Heightened uncertainty will likely dent investment flows and confidence, weighing on the UK’s growth prospects - a credit negative for the UK sovereign and other UK debt issuers.”

Fitch said Brexit would be “moderately credit negative” for the UK sovereign with the leave result impacting on most industry sectors.

Reuters