Businesses, markets breathe sigh of relief after Scotland votes No

A sigh of relief echoed across the investment and business community today, after Scotland voted against independence.

The No vote ended a fraught few weeks for markets that had seen the value of sterling fall sharply after some polls suggested the 307-year old United Kingdom union was on the brink of splitting.

“Now that the Scotland independence vote is out of the way, risk aversion in asset markets has subsided,” Soeren Moerch, head of fixed-income trading at Danske Bank, said.

Royal Bank of Scotland said its contingency plan to move its registered head office to England in the event of a Yes vote was no longer required.

“Following the result it is business as usual for all our customers across the UK and RBS,” the bank said in a statement.

RBS and Lloyds, both domiciled in Edinburgh, said last week they would move to England if Scots chose independence.

The banks may still opt to move their legal headquarters to London in coming years to remove the risks associated with any future referendum, some analysts said.

“We sense that the two banks will become redomiciled south of the border in any event, given the prospects of a demand for another referendum in the medium term,” Chris Wheeler, a London-based analyst at Mediobanca said.

Aberdeen Asset Management chief executive Martin Gilbert said UK investors would welcome a reduction in the uncertainty of recent months.

“A split would have seen months of negotiations, including a clash over what currency an independent Scotland would have used”.

Northern Ireland Chamber of Commerce chief executive Ann McGregor said Scotland was a very important trading area for a large number of northern businesses, with PwC’s latest economic outlook estimating that annual Northern Ireland manufacturing sales to Scotland are approximately £700 million.

“Those businesses faced the possibility of having to deal with two separate regulatory regimes, two different tax systems and possibly even an exchange rate – none of which would make business any easier”.

Many companies with Scottish connections outperformed the general market, including RBS, Lloyds and BP, which all rose.

Additional reporting: Bloomberg, Reuters