The ratings agency Standard and
Poor's (S&P) has cut its outlook for the UK economy because of a
planned referendum on EU membership.
The referendum "represents a risk to growth prospects" for the country's economy, S&P said in a statement.
S&P changed its outlook to negative from stable but kept its current rating on the UK the same.
Prime Minister David Cameron has promised an in-out referendum on the UK's membership in the EU by 2017.
Responding
to the move, the Treasury said: "We are the first to say that this is a
time of heightened risk that threatens the recovery, which is why we
need to go on working through the plan that is delivering economic
security.
"Central to that plan is giving the British people
their first say on our EU membership in forty years and resolving the
uncertainty around Britain's relationship with the EU," it added.
'Party politics'
However, S&P warned that it wasn't just the referendum that was causing concern.
"We
believe a possible UK departure from the EU also raises questions about
the financing of the UK's large twin deficits and its high private
short-term external debt," it added.
Furthermore, S&P cautioned that a lack of political consensus could affect UK economic policy in the future.
"It
is also our view that the calling of a referendum on EU membership
indicates that economic policymaking could be at risk of being more
exposed to party politics than we had previously anticipated," it
continued.
A lower credit rating makes it more expensive for a
country to borrow money. A negative outlook means a one-in-three chance
of a downgrade in the next two years.
S&P is the only major
ratings agency to still give the UK a top rating of AAA, because it
views the UK economy as flexible and diversified.
The other two,
Moody's and Fitch, both downgraded the UK in 2013 over worries about its
economic growth and the country's ability to repay its debt.
Earlier
this week, the independent watchdog the Office of Budget Responsibility
warned that years more spending cuts would be needed in order to bring
the national debt under control.
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