United Kingdom Ratings Affirmed At 'AAA/A-1+'; Outlook Remains Negative On EU Referendum Uncertainties

OVERVIEW 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 (due before end-2017 but more likely for 2016) represents a 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, this may also challenge the financing of its "twin" deficits, and would likely lead to demands for another referendum on Scottish independence. On balance, we believe that a "remain" vote remains the more likely outcome, in which case the U.K. economy is likely to broadly maintain its status quo. We are therefore affirming the ratings at 'AAA/A-1+'. The negative outlook reflects the possibility of

...OVERVIEW + 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 (due before end-2017 but more likely for 2016) represents a 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, this may also challenge the financing of its "twin" deficits, and would likely lead to demands for another referendum on Scottish independence. + On balance, we believe that a "remain" vote remains the more likely outcome, in which case the U.K. economy is likely to broadly maintain its status quo. + We are therefore 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. RATING ACTION On Dec. 11, 2015, Standard & Poor's Ratings Services affirmed the unsolicited '###/A-1+' long- and short-term sovereign credit ratings on the United Kingdom (U.K.)....

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