The United States’s rating agency, Moody’s, has lowered the growth outlook for the United Kingdom and for the eurozone, following the Brexit win in the EU referendum on June 23 that diminished confidence among the entire currency bloc, including Britain.

Moody’s reduced its growth expectation for the UK to 1.5 percent in 2016 and 1.2 percent in 2017, from 1.8 percent and 2.1 percent previously. The agency also lowered its euro area growth expectations to 1.5 percent for 2016 and 1.3 percent for 2017, from 1.7 percent and 1.6 percent previously.

Besides, curbing economic growth in the euro area, the Brexit vote is likely to result into a shock to the current confidence levels, Moody’s said. It further added the uncertainty around the future of the UK outside of Europe’s common market is likely to dampen business investment and consumer spending in the UK.

"The downside risks to global growth stem not from the possibility of a recession in the UK, but from the possibility that developments in the UK may give rise to increased political risk elsewhere in the EU," said Elena Duggar, Associate Managing Director, Moody’s.

Further, there will arise deep pressure on employment opportunities in the UK, apart from affecting long-term investments as consumers postpone large spending decisions. However, the rating agency added that the direct impact on growth in the EU will be less significant, due to limited EU exposure to direct economic and trade linkages.