The only major ratings agency that still gives Britain a AAA ranking has said the country remained at risk of a downgrade due to David Cameron's decision to hold a vote on whether to leave the European Union.
Shortly after the International Monetary Fund said uncertainty over the referendum could hurt Britain's growth prospects, Standard & Poor's said it was keeping its outlook for Britain's top-notch rating at negative.
The agency reiterated its decision in June to put the country on notice that it faced a one-in-three chance of a downgrade in the next two years.
The overall effect of immigration had been positive for the British economy, S&P claimed
S&P challenged one of the main arguments of supporters of a British exit from the EU, saying the overall effect of immigration had been positive for the economy over the past decade.
It repeated its view that the referendum represented a risk to Britain's large financial services sector, its exports and the wider economy. If Britain quit the EU, it could jeopardise its ability to fund a large deficit in its balance of payments.
"In a worst-case scenario, a Brexit could also harm sterling's role as a global reserve currency, removing what has been a significant support for our 'AAA' rating on the UK since the start of the global financial crisis," it said.
S&P said it expected the Government to reach a compromise with the rest of the EU on reforms of the bloc in the first half of next year and that most voters in Britain would reject a so-called Brexit in the referendum.
But it noted that the "leave" campaign was more highly funded and better organised than the "remain" campaign, raising the risk of a vote to leave the EU.
S&P's chief European sovereign rating officer told Reuters in October that Britain's credit rating could be cut by as much as two notches if it leaves the EU.
A separate plan to devolve powers to Scotland and Wales could distract the Government from fixing some fundamental problems in the economy such as a shortage of new housing which would hurt Britain's competitiveness, S&P said.