Fitch also downgraded the UK, from AA+ to AA with a negative outlook. "The UK vote to leave the European Union in the referendum on 23 June will have a negative impact on the UK economy, public finances and political continuity," Fitch said in a statement.

S&P said: "In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK.

"We have reassessed our view of the UK's institutional assessment and now no longer consider it a strength in our assessment of the rating."

Wider constitutional issues

S&P also noted that a Remain vote in the EU referendum in Scotland and Northern Ireland "creates wider constitutional issues for the country as a whole".

The agency added: "The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence.

"Fitch believes that uncertainty following the referendum outcome will induce an abrupt slowdown in short-term GDP growth, as businesses defer investment and consider changes to the legal and regulatory environment.

"Medium-term growth will also likely be weaker due to less favourable terms for exports to the EU, lower immigration and a reduction in foreign direct investment. An adjustment in the value of sterling and changes in the business environment could also affect growth."

Following the referendum last week Moody's changed the outlook on the UK's ratings to negative from stable.

Heightened uncertainty

During the several years in which the UK will have to renegotiate its trade relations with the EU, Moody's expects heightened uncertainty, diminished confidence and lower spending and investment to result in weaker growth.

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.

As a consequence of the weaker GDP growth outlook and institutional strength, the UK's public finances will also likely be weaker than Moody's has assumed so far. In Moody's view, the negative effect from lower economic growth will outweigh the fiscal savings from the UK no longer having to contribute to the EU budget.

The UK government has one of the largest budget deficits among advanced economies, and lower GDP growth will further complicate the implementation of the government's multi-year fiscal consolidation plan. Consequently, the public debt ratio will likely remain higher than the rating agency previously expected.

Concurrent with the rating action on the sovereign, Moody's has also changed the outlook to negative for the Aa1 rating of the Bank of England from stable. The Aa1/P-1 ratings were affirmed. The UK's long-term and short-term foreign and local-currency bond and deposit ceilings remain unchanged at Aaa/ P-1.

Rule of law & budget deficit

Moody's considers many aspects of the UK's institutional framework to be very strong, such as the rule of law, a strong fiscal framework as well as a highly credible central bank that has been successful in achieving its policy objective and a professional and highly qualified civil service. However, the decision to exit the EU will pose material challenges for policymakers and officials.

Another driver for the outlook change to negative from stable is the negative effect on the UK's public finances arising from lower economic growth.

The rating could be downgraded if the negotiations are protracted and suggest that the UK government is unlikely to conclude a trade agreement with the EU that will protect core elements of the UK's current access to the EU Single Market.

The rating would also come under downward pressure if there is no further material progress in reducing the government's budget deficit, as this would leave the public debt burden close to the current levels in the next several years.

A third driver for a downgrade of the rating could be the emergence of heightened pressures on the exchange rate in the context of substantial and persistent capital outflows, as this would raise questions over the funding of the UK's large current account deficit of more than 5% of GDP (2015) and more fundamentally over the role of Sterling as one of the few global reserve currencies.

The outlook could be returned to stable if Moody's concluded that the UK government is likely to be able to negotiate a trade arrangement with the EU that preserves core elements of the UK's current access to the Single Market.

This in turn would limit the economic impact from the EU exit and allow for a continued improvement in the country's public finances and a gradual reduction of public debt over the coming years.