S&P strips UK of last top-notch credit rating after Brexit vote; Downgrades UK from AAA to AA

[SirLinksALot]

SOURCE: YAHOO FINANCE VIA REUTERS

URL: http://finance.yahoo.com/news/p-strips-uk-last-top-182305109.html

by Andy Bruce


Ratings agency Standard & Poor's stripped Britain of its last remaining top-notch credit rating on Monday, slashing it by two notches from AAA and warning more downgrades could follow after Britons voted to leave the European Union last week.

S&P's move was a fresh blow to Britain's economic standing after the referendum. Sterling tanked to a 31-year low against the dollar on Monday and the country's stock markets plunged.

S&P said it was the first time it had chopped an AAA-rated sovereign credit rating by two notches in one go.

"In our opinion, this (referendum) outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK," S&P said in a statement.

Finance minister George Osborne said on Monday the British economy was strong enough to cope with the volatility caused by Thursday's referendum.

But the vote has plunged the country into political turmoil, with the ruling Conservative Party looking for a new leader after Prime Minister David Cameron said he would stay on only until October.

The added prospect of a new independence referendum in Scotland - which voted strongly to stay in the EU - threatens the constitutional and economic integrity of the United Kingdom, S&P warned.

Long-dated U.S. Treasury yields fell to session lows after the ratings agency's decision. British 10-year government borrowing costs had already fallen below 1 percent for the first time during European trading hours. [GBP/]

S&P warned financial firms - especially foreign ones - might look to other destinations for investment after Britain leaves the EU.

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[geronl]

Leftists throwing temper-tantrums

[ABX]

There are a lot of good stocks that have been beat down simply due to the uncertain nature of what will happen. It is a buying opportunity. I picked up some Barclays this morning dirt cheap.

[geronl]

The UK is going to become stronger over time because of this, they should be happy to be free of the EUSSR

[ABX]

The UK is going to become stronger over time because of this, they should be happy to be free of the EUSSR

I'm actually not sure what will happen. It is going to come down to how well the UK government handles it, if the even let the referendum stand (it is non binding and they are already calling for a revote. the UK government is very liberal, even by our standards.  I wouldn't be surprised if they even try to punish the people who supported this by doing things like freezing trade deals, etc.

It could go smoothly and be transparent, having a relationship with the EU similar to Switzerland, or it could be a disaster.

[Cyber Liberty]

There are a lot of good stocks that have been beat down simply due to the uncertain nature of what will happen. It is a buying opportunity. I picked up some Barclays this morning dirt cheap.

RBS looks like another candidate.  They've been getting the snot beaten out of them the past two sessions...