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UK could be at risk of a downgrade, S&P says

Uncertainty looms on all fronts should the U.K. on June 23 vote to leave the European Union, leaving the country's cherished top grade triple A sovereign rating susceptible to a cut, a senior Standards and Poor executive said Wednesday.

Citing short-term financial markets volatility as an immediate risk, global ratings director of the agency's corporate and government ratings, Taron Wade, told CNBC's "Capital Connection" that the risk of the UK losing its rating should it vote to leave the EU would be "great".

Accompanying worries include a depreciation in the sterling.

In the medium-term, companies may cut down on capital investment as companies would not know how to invest in the new environment.

A Eur
Christopher Furlong | Getty Images
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"We've actually already seen a decline in forecast capex spend for the U.K. relative to Europe," she said.

A reduction in capital spending would make companies less competitive over time.

As for the long-term, there will be uncertainty over regulation and trade barriers following a Brexit.

"It's concerning if you don't know what the regulatory environment will be in terms of competition commission and also U.K. companies could get left out of European consolidation trends," she said.

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