The world’s three leading ratings agencies have all moved to lower the long-term credit rating of the UK following the country’s Jun. 23 vote to leave the European Union. Moody’s was the first to act, followed by Fitch and Standard & Poor’s (S&P). 

Financial market observers noted that the downgrades will not only make borrowing harder for the UK itself but will also could have a ripple effect on all 28 EU member states and hit corporate profits of corporations in the US and Japan as well as Europe. Moody’s lowered the UK’s rating from AAA to AA in 2013, amid the UK government’s austerity cuts. Following the Brexit vote, it lowered the credit rating outlook to “negative” but kept its overall rating at Aa1.

At the same time, the agency hinted that it might cut the rating farther, as leaving the EU could herald a prolonged period of uncertainty with negative implications for the country’s medium-term growth outlook.

Fitch cut its post-Brexit credit rating for the UK from AA+ to AA, with a negative outlook as well as lowering its economic growth forecast to 0.9% for 2017 and 2018 from 2% previously. In an analysis the agency said: “Fitch believes that uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth.”

Standard & Poor’s, the last agency to act, lowered its rating from AAA to AA+.  Following the decision by the UK electorate to leave the EU, it said, “We have reassessed our opinion of cohesion within the EU, which we now consider to be a neutral rather than positive rating factor.”

S&P also placed the UK on a negative watch, an indication of possible further downgrades. It described the outcome of the Brexit vote as “a seminal event” that would “lead to a less predictable, stable and effective policy framework in the UK.”

All the ratings agencies said they believe Scotland’s and Northern Ireland’s vote to remain in the EU creates farther-reaching issues for the country as a whole.