Channel Islands credit ratings downgraded to AA

Jersey Treasury Minister, Senator Alan Maclean, said the reasons for the drop were out of the island's control

The Jersey and Guernsey credit ratings have been downgraded for the first time from AA+ to AA by international credit rating agency Standard and Poor's.

The agency blamed rising regulatory complexity and greater focus on low tax regimes by the G10 on the drop.

It also said the outlook was negative due to the risk to the finance industry if the UK voted to leave the EU.

In November Standard and Poor's reversed a decision to downgrade Guernsey's rating after an appeal.

The appeal had been made then by Guernsey Treasury and Resources.

Jersey was given its first credit rating - of AA+ in 2014 - so it could borrow money to build more social housing.

Jersey and Guernsey have confirmed that they have no intention of appealing this decision which is based on a revised approach by Standard and Poor's as to how they now assess future risks for small sovereign states compared to larger countries.

Jersey treasury minister Senator Alan Maclean said the rating change did not reflect any decline in the economy which is performing better now than at anytime since the financial crisis began in 2008.

He said: "We are clearly disappointed that Jersey and Guernsey and other small sovereign states are all now being assessed in a different way by Standard and Poor's and that this recalibration has resulted in all the credit ratings being lowered. The UK also had its rating revised to negative in June 2015 to reflect the possible impact of it leaving the EU.