Research Update: United Kingdom Ratings Affirmed At 'AAA/A-1+'; Outlook Remains Negative On Uncertain EU Referendum Vote

In our opinion, the possibility that the U.K. could leave the European Union (EU) as a consequence of a planned "leave or remain" referendum set for June 23, 2016, represents a significant risk to the U.K. economy, in particular to its large financial services sector and exports. If the U.K. were to leave the EU, it may make financing its twin deficits more difficult, particularly its large current account deficit, which stood at 5.2% in 2015. A vote to leave would also likely lead to demands for another referendum on Scottish independence, leading to further uncertainty. We are affirming the ratings at 'AAA/A-1+'. The negative outlook reflects the possibility of at least a one-in-three likelihood of a downgrade over the

...In our opinion, the possibility that the U.K. could leave the European Union (EU) + as a consequence of a planned "leave or remain" referendum set for June 23, 2016, represents a significant risk to the U.K. economy, in particular to its large financial services sector and exports. If the U.K. were to leave the EU, it may make financing its twin deficits more + difficult, particularly its large current account deficit, which stood at 5.2% in 2015. A vote to leave would also likely lead to demands for another referendum on + Scottish independence, leading to further uncertainty. We are affirming the ratings at '###/A-1+'. + The negative outlook reflects the possibility of at least a one-in-three + likelihood of a downgrade over the next two years....

Research Update