S&P just slashed its rating for the EU from AA+ to AA

 
Hayley Kirton
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Britain Reacts To The EU Referendum Result
The EU isn't alone - the UK also had its rating downgraded by S&P as a result of the Brexit vote (Source: Getty)

S&P Global Ratings announced today that it was slashing its rating for the EU.

The agency cut its long-term rating from AA+ to AA with a stable outlook, meaning it does not foresee the rating changing again in the next two years.

The decision to cut the rate was a direct result of the UK's Brexit vote last week, with the note stating that the referendum result had caused S&P to view of the cohesion within the EU as a neutral, rather than positive, factor.

According to the note, the Brexit vote has lead S&P to believe that "revenue forecasting, long-term capital planning, and adjustments to key financial buffers of the EU will be subject to greater uncertainty."

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However, the note also added that the agency expected the other 27 member states would "reaffirm" their commitment to the union.

Earlier this week, S&P axed its rating for the UK, downgrading it from the gold standard AAA to AA and describing the vote result as "a seminal event"

Unlike the EU, the UK's new rating was given a negative outlook, meaning that S&P expects it might have to inch it down again in the foreseeable future.

Fellow ratings agency Fitch has also reduced its rating for the country from AA+ to AA, again with a negative outlook.

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