THE FALLOUT FROM Britain’s referendum to leave the EU last Thursday continues to snowball.
In the past hour Standard and Poor’s has downgraded Britain’s credit rating by two grades from AAA to AA, citing the result of the Brexit vote as the direct cause of this.
Credit ratings were at the centre of much of the discussions during Ireland’s tumultuous period following the collapse of the Celtic Tiger in 2007/2008 – and are an indicator on a country’s ability to pay back its debts, and in turn impacts on its ability to borrow on the international markets.
In a statement this afternoon the credit rating agency has said:
In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK. We have reassessed our view of the UK’s institutional assessment and now no longer consider it a strength in our assessment of the rating.
In the statement the remain vote that has taken place in Northern Ireland and Scotland is also noted as a concern due to the “wider constitutional issues” it brings up.
This will come as unsettling news to the UK Chancellor of the Exchequer George Osborne who earlier this morning sought to give assurances to international markets.
Speaking at the Treasury this morning he said that the British economy would have to “adjust to the new situation” but that it was prepared for the fallout from Brexit.
“I said we had to fix the roof so that we were prepared for what the future held. Thank goodness we did. As a result our economy is about as strong as it could be to confront the challenge our country now faces,” he said.
The chancellor stated again that the article 50 of the Lisbon treaty – which would trigger Britain’s formal withdrawal from the EU – would not have to be triggered until later this year.
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