Credit Ratings

S&P revises UK outlook to negative from stable

S&P cuts UK outlook

Standard & Poor's revised the United Kingdom's outlook to "negative" from "stable" Friday, citing risks posed by the country's potential departure from the European Union.

The ratings agency affirmed its "AAA/A-1+" rating for the U.K. The recently re-elected government of Prime Minister David Cameron is slated to hold a referendum on EU membership by 2017.

"The outlook revision reflects our view that the decision of the newly elected Conservative majority government to hold a referendum on the U.K.'s EU membership by 2017 represents a risk to growth prospects for the U.K.'s financial services and export sectors as well as the wider economy," S&P said in a release.

David Cameron
Jasper Juinen | Bloomberg | Getty Images

A possible EU exit also "raises questions" about the country's ability to finance its deficits and short-term external debt, S&P said. The agency noted party politics could affect economic policy more than previously anticipated.

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"In our opinion, the outcome of the general election could make consensus-based policymaking more challenging," S&P said.

It could lower Britain's rating "should we conclude that departure from the EU is likely over the medium term." S&P is the only major agency to still give the country top-notch ratings.

Cameron's Conservative Party won a parliamentary majority last month, obtaining about 37 percent of the national vote. The party has a strong wing of "euroskeptics" who believe the openness of the EU economy has hurt more than helped Britain.

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Reuters contributed to this report.