S&P warns Britain’s AAA rating threatened by EU exit risk
British Prime Minister David Cameron speaks during a press conference after talks with his Polish counterpart Beata Szydlo in Warsaw, Poland, Thursday, Dec. 10, 2015. Cameron came to Poland to discuss his plans for having a reform of the EU, fight against extremists and also issues concerning some two million Poles living in Britain. AP Photo
LONDON, United Kingdom—Ratings agency Standard & Poor’s warned Friday that the risk of Britain leaving the European Union could affect its triple-A ranking.
S&P, the only major ratings agency to rate Britain as AAA, maintained the ranking with a negative outlook due to uncertainties over a coming referendum on Britain’s EU membership.
It came shortly after the International Monetary Fund warned that uncertainty over a so-called “Brexit” could hurt its economy.
“In our opinion, the possibility that the UK could leave the European Union (EU) as a consequence of a planned ‘leave or remain’ referendum… represents a risk to the UK economy,” S&P said in a statement.
British Prime Minister David Cameron has promised to hold a referendum before the end of 2017, while renegotiating the terms of Britain’s membership in the meantime.
READ: Cameron lays out demands for Britain to stay in EU
Most opinion polls show greater support for remaining within the 28-member bloc among the British public, though the pro-EU lead has been narrowing.
READ: Only 1 in 3 Britons wants to stay in EU—poll
If Britain were to leave the EU, S&P warned that London would lose its ability to influence EU policies on financial services, put at risk financing services for its public deficit, and in a worse case scenario “harm sterling’s role as a global reserve currency.”
Nevertheless, the ratings agency noted that it believed the most likely outcome would be that Britain would vote to remain within the EU.
Ratings agency Fitch also said on Friday that it believed it was most likely Britain would remain in the EU, saying its outlook was “stable.”
It said a vote to leave the EU would be a “moderately negative credit development” and risk “triggering a second referendum on Scottish independence” following a plebiscite held in 2014.
