S&P warns Brexit could sap investment in UK infrastructure
The majority of infrastructure investors in the UK market believe that a Brexit would zap much-needed investment in buildings, roads and power supplies for at least two years after the vote.
Research by credit ratings agency S&P showed that while Britain's exit from the 28-nation bloc could cripple infrastructure investment in the short-term, capital would return once the immediate fallout had settled.
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"The uncertainty introduces risks for both domestic and foreign investors, and therefore concerns for debt financing and credit quality," S&P global ratings managing director and head of infrastructure research, Michael Wilkins, said.
S&P added that a potential leave vote, or any volatility in the event of a Brexit, wouldn't have direct implications for credit quality in the infrastructure sector.
"The worries about political instability and macroeconomic turbulence are unlikely to directly impinge on investment, but rather postpone decisions to make investments, as investors stay on the sidelines until the UK-EU relationship is renegotiate or until the economy settles down."
Read more: The UK now has its own infrastructure investment fund
"Yet, this may be a shorter-term phenomenon, which our survey results also suggest. One explanation could be that investors may leave the market in the short run, and re-enter once they have more visibility."
Less than half of the respondents said they believed that the UK is likely or very likely to leave the EU.
The survey was based on opinions collected in the latter half of April from 51 investors in the UK and abroad.