S&P reaffirms UK sovereign debt rating at AA, but outlook still negative

Standard&Poor's reiterated its rating on the UK's long-term sovereign debt, despite the risk that the withdrawal agreement that had been reached overnight between Brussels and London might not make it through Parliament, forcing both sides to return to the bargaining table.

The rating agency's analysts continued to believe that an "orderly" withdrawal, including a transition period running until at least December 2020, remained the most likely scenario.

Hence, Britain's long-term debt rating was kept at AA, which was just one notch below the highest mark possible.

Nevertheles, the so-called 'outlook' for the country's debt was kept at 'negative', reflecting the risk to the government's finances should UK merchandise and services exports lose access to key European markets, if external financing decreased or if Sterling's status as a reserve currency be called into question, the ratings agency said in a statement.

Any agreement that imposed significant limits on the UK's access to European markets might result in a ratings downgrade, S&P said, although if key sectors retained their access then the outlook might be revised back to 'stable'.