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Britain’s AAA Credit Rating ‘Untenable’ After Brexit Vote

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Nigel Farage, leader of the Leave movement, reacts to pro-Brexit vote.Photograph by Geoff Caddick AFP — Getty Images

Ratings agency Standard and Poor’s said Britain’s top-notch “AAA” credit rating is no longer tenable after voters opted to leave the European Union, The Financial Times reported on Friday.

“We think that a AAA-rating is untenable under the circumstances,” Moritz Kraemer, chief ratings officer for S&P, told the FT.

Rival ratings agencies Fitch and Moodys have already stripped Britain of their AAA ratings, long before the referendum campaign began.

S&P has previously said its AAA rating for Britain reflected its assumption that the referendum would deliver a vote to remain in the EU.

Meanwhile, the Bank of England promised it would “take all necessary steps” to keep financial markets stable as a day of carnage threatened on London’s financial markets in the wake of Britain’s decision to leave the European Union.

In a statement, the BoE said that it “is monitoring developments closely, has undertaken extensive contingency planning, working closely with Her Majesty’s Treasury, other overseas authorities and central banks (and) will take all necessary steps to meet its responsibilities for monetary and financial stability.”

The pound is facing its worst one-day loss ever, having fallen 12% from over $1.5000 to a low of $1.3241 in the space of only six hours.

However, it appeared to bounce as the referendum result was confirmed, and rose further after David Cameron, the Prime Minister who had led the Remain camp, announced he would resign by October, so that a new Prime Minister can conduct negotiations with the E.U. on future relations between the two sides.

Bank of Japan Governor Kuroda and Japanese Finance Minister Taro Aso said central banks of six major developed nations have currency-swap lines at the ready to provide liquidity.