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From the current state of play, it seems the polls were right in the end and Scotland will vote ‘No’ overall. We have seen the pound breach $1.65 against the dollar and a strong start to the FTSE is expected, but the current movements are nothing compared to what would have come to pass if Scotland voted ‘Yes’.
A relief rally is in the making in UK markets, and key areas to watch will be banks such as RBS and Lloyds, as well as big Scottish firms like Standard Life, Aberdeen Asset Management and Weir Group. Investors in these firms will be relieved that management will be able to devote their time to business performance, rather than fretting about contract changes or headquarters moves. Meanwhile, the capital flight from the pound and gilts should see a reversal too, thanks to the Scottish decision to remain with the 307-year-old union.
There is still uncertainty, primarily over the new powers to be allotted to the Scottish parliament and the potential changes to voting on English issues, but these are of importance primarily to politicians and less so to markets.
Now the attention turns to the fate of Alex Salmond. Having thrown everything at the referendum, his position will come under pressure, while questions will be asked about why Westminster politicians left it so late to take a real part in the debate. However, the worry of Scottish independence is now off the agenda for markets.