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S&P sees "heightened risk" in UK funding needs after Brexit
April 28, 2017 / 5:09 PM / 7 months ago

S&P sees "heightened risk" in UK funding needs after Brexit

LONDON, April 28 (Reuters) - Ratings agency Standard & Poor’s said on Friday that Britain’s decision to leave the European Union had created “a heightened risk” around the country’s large borrowing needs and could put strains on the historic make-up of the United Kingdom too.

S&P, in a statement affirming the possibility of a further downgrade Britain’s sovereign debt rating which it cut after the Brexit vote, said the U.K.’s gross external financing needs were the highest among all 131 sovereigns rated by the agency.

“Despite our forecast for a slight narrowing of the current account deficit, we still view the U.K.’s high external deficits as a vulnerability, and we view an EU departure as a risk to financing sources,” the ratings agency said.

“We further think Brexit will continue to create challenging political and constitutional issues around the unity of the United Kingdom, especially if it results in a second referendum on Scottish independence or increases tensions around Northern Ireland,” it said.

S&P cut Britain’s top-notch AAA credit rating by two places to AA shortly after last June’s vote to leave the EU, saying the country’s capacity for effective and stable policymaking had diminished. (Writing by William Schomberg; Editing by Alistair Smout)

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