(Bloomberg) -- A disorderly Brexit may see further cuts to the U.K.'s credit rating, according to S&P Global Ratings.
S&P, which downgraded the U.K. by two notches to AA after the referendum, said in a statement Monday that such a scenario may become more likely if the nation's lawmakers misjudge the European Union's negotiating position. The firm said the EU's self-preservation is at stake, meaning it is “unlikely to take a ‘soft' line in the negotiations” lest it spark a domino effect of more member states opting to leave.
“The U.K. government at the time misread the electorate's mood when it invited it to vote on EU membership,” said Moritz Kraemer, global chief rating officer at S&P. “It is hopefully not also misjudging central convictions held across the channel. Otherwise, a disorderly Brexit could become increasingly likely. Such a turn of events would bring renewed downward pressure to Britain's sovereign rating.”
S&P currently has the U.K.'s AA score under review with a negative outlook. It is scheduled to deliver an update on its rating in April.
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net.
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint, Lucy Meakin
©2018 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
