Outlook remains negative
S&P has affirmed the rating on UK at AA/A-1+. They have also affirmed the Long term sovereign credit rating at AA
They add:
- Brexit continues to present a significant risk to the UKs track record of strong economic performance
- Rating remains negative reflecting continued institutional economic uncertainty surrounding BREXIT negotiations
- We also see a heightened risk to external financing conditions in light of the UK's high gross external financing requirements
- UK has prospered as EU members and subsequent deal with EU will likely not be as beneficial for economy as full membership
- Outlook on longer-term rating of the Bank of England is also negative/ Affirms BOE AA/A-1+ long and short term issuer credit ratign
- Further thinks Brexit will continue to create challenging political and constitutional issues around the unity of the United Kingdom
- Despite forecast for slight narrowing of current account deficit still view UK's high external deficits as vulnerable
- view the UK's monetary exchange rate flexibility as a key credit strength
- Given uncertainties around Brexit negotiations expects GDP growth in 2017-2020 to average 1.4%. This is down from pre-Brexit forecast of 2.1%
- Could lower the ratings of the UK if GDP per capita or public finances weaken markedly beyond S&Ps current expectations
