FILE PHOTO: British and EU flags flutter outside the Houses of Parliament in London, Britain January 30, 2019. REUTERS/Toby Melville

LONDON (Reuters) - Britain and the European Union continue to have a “very strong incentive” to avoid a no-deal Brexit which would damage the outlook for its sovereign credit rating, ratings agency Standard & Poor’s said on Wednesday.

“The political incentive for the UK and the EU to negotiate an orderly outcome -- even after a potential delay -- remains very strong,” S&P said in a note to clients.

“A no-deal Brexit could result in negative revisions of our outlooks on ratings where a weaker UK economy could lead to weaker credit metrics and downgrades where disruption is more immediate and material,” the ratings agency added.