Ratings agencies Standard & Poor's and Fitch scaled back their warnings that Britain might suffer a new credit downgrade, saying Prime Minister Boris Johnson's emphatic election victory last week reduced the risk of a no-deal Brexit next month.

S&P raised Britain's outlook to stable from negative while Fitch took the country off its rating watch negative list although it kept its broader outlook at negative.

Johnson now plans to pass legislation to prevent the country asking for an extension to a Brexit transition period which is due to expire on Dec. 31, 2020.

S&P said it expected a no-deal Brexit at the end of next year would be avoided by London asking for more time.

"Despite the government's current stance, we expect that the UK will seek, and the EU will grant, an extension beyond December 2020 to negotiate the future relationship between the two," the ratings agency said.

Fitch said the risk of a "cliff-edge" Brexit at the end of next year had not disappeared.

S&P's sovereign credit ratings for the country stand at AA/A-1+. Fitch affirmed its AA rating.