Business backs Scotland’s ‘No’ vote in independence referendum
- 19th September 2014
- Business & Economy
Businesses and investors have reacted with confidence to Scotland’s decision to stay as part of the UK.
Scotland’s decision to remain part of the United Kingdom marked a watershed moment in the nation’s political life. But it also sent ripples throughout the business and finance landscape, as the world reacted to a vote that ended months of uncertainty. That relief has been reflected in an influx of votes of confidence in the Union this morning, although in some respects the markets are already calming down again.
Pound Sterling impact
The much-discussed pound rallied considerably this morning, but its performance has proven to be more erraticthan might have been expected. Sterling shot up against the dollar this morning when it became obvious that a No vote would be returned, but eased off again as the result was confirmed. In fact, by 1.41pm BST the pound was actually down on the greenback. That could be the result of profit-taking, considering the fact that a day’s worth of sterling was apparently traded in the first two hours of the day. It could also be a sign that uncertainty remains about what new powers Edinburgh could be given under a new devolution settlement. But the dollar has also been rising, and the pound also hit a two-year high against the euro.
Financial services gain
A number of banks that had suggested they might move their registered headquarters south of the border if Scotland chose independence have been quick to announce that those plans have been scrapped. RBS and Lloyds have both already said they no longer see any need for their contingency plans to relocate to London. Early trade saw shares in RBS just four per cent on the European banking index, while Lloyds jumped by 2.8 per cent and TSB shares rose by 3.7 per cent. Insurer Standard Life, who had also suggested they might move to ensure stability, was also trading up 1.6 per cent.
Stock markets rebound
As has been mentioned time and time again during the referendum campaigns, markets react badly to uncertainty. Few things have rattled markets like the potential for a break-up of the UK, and the certainty that came with the no vote has been positively reflected in the stockmarket. Companies with close relationships to Scotland led the way as the FTSE 100 rose by 0.74 per cent as of 11.40 BST.
Business groups relieved
John Cridland, director general of the Confederation of British Industry (CBI), said the result would be “greeted by a collective sigh of relief across the business community”.
“Business has always believed that the Union is best for creating jobs, raising growth and improving living standards, and welcomes that the people of Scotland want to play an integral role in this internationally successful partnership,” he explained, adding that further devolution must not undermine the single internal market.
Institute of Directors director general Simon Walker agreed, adding that the decision may mean less disruption would come with separation, but will still lead to some level of upheaval in the future as new powers are handed down to Edinburgh.
“As negotiations commence on a future settlement for Scotland, the focus must be on ensuring that any new powers are used to boost economic competitiveness, unleash enterprise and attract further investment,” he said.
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