Leading global credit rating agency Moody's has slashed UK's credit rating outlook to 'negative' from 'stable' as the country's stunning decision to quit the European Union paved way for a prolonged period of uncertainty for its economy.
Britain is likely to face a massive challenge as it seeks to negotiate its exit from the EU, the ratings firm warned, adding that the likelihood of lower economic growth including the loss of jobs and investment will outweigh any savings that the UK is hoping to receive from no longer having to contribute to the EU budget.
"Over the longer term, should the UK not be able to secure a favourable alternative trade arrangement with the EU and other countries, the UK's growth prospects would be materially weaker than currently expected," the agency's note said.
Thursday's EU referendum that showed 51.9 per cent Brits favoured the UK exiting the EU, overpowering 48.1 per cent that supported the country remaining in the trade block, will have "negative implications for the country's medium-term growth outlook", Moody's which assigned a negative outlook to its 'Aa1' rating for British government debt, said.
Meanwhile, the pound hit a 31-year low while the FTSE 100 sank over 3 per cent as Brexit caused a global financial catastrophe.