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The European Union has seen its credit rating cut after the UK voted to leave the union.

Ratings agency Standard and Poor's said a reassessment "of cohesion within the EU, which we now consider to be a neutral rather than positive" led to it cutting its credit rating from AA+ to AA.

S&P said its previous rating was based on all 28 members of the European Union remaining in the bloc.

It said: The rating action stems from S&P Global Ratings' view that the UK government's declared intention to leave the union lessens the supranational's fiscal flexibility, while reflecting weakening political cohesion.

"Our baseline scenario was previously that all 28 member states would remain inside the EU. While we expect the remaining 27 members to reaffirm their commitment to the union, we think the UK's departure will inevitably require new and complicated negotiations on the next seven-year budgetary framework.

"Going forward, revenue forecasting, long-term capital planning, and adjustments to key financial buffers of the EU will in our view be subject to greater uncertainty."

Earlier this week, S&P also cut the UK's credit rating, from AAA to AA+, because the Brexit vote would lead to "a less predictable, stable and effective policy framework in the UK".