Scotland's referendum: For now, it’s business as usual

The first and initial reaction of business after Scotland’s decision to stay within the UK has inevitably been one of relief, and contingency plans for an independent Scotland thankfully consigned to the trashcan.

RBS, which planned to move its headquarters if Scotland voted yes, categorically announced it will stay put. Markets, which had more or less presumed the result, shrugged off the results – while the sterling hit two+-year high against the euro overnight, it settled down later.

Says a Barclays research report: In truth, the impact of the uncertainty surrounding the vote both at the market level and for individual stocks has been relatively small.”

Market analysts are of the opinion that BoE’s interest rate policy, which might see a rise in interest rates as early as next year, is of more concern. After the immediate aftermath though, there are concerns about the political aftermath.

“Crucially we still have to worry about the prospect of major constitutional upheaval. This means that investors are still likely to demand a higher political risk premium in their valuation of UK assets,” said Gregor Macintoch, head of sovereign and emerging debt at Lombar Odier.

The Devo Max – maximum devolution – proposals that were agreed to by all parties prior to the vote, promised Scotland more powers of self governance – and is to be extended to Wales, Northern Ireland and England.

In the runup to, and after the general elections due next year, proposals that will allow regions within the UK to make not just spending, but taxation decisions, which have to be agreed to by all parties is spooking businesses.

“The tensions arising from a monetary union bereft of sufficient fiscal union are still being suffered in the euro-zone. These need to be avoided in the UK,” said Neil Williams, group chief economist of Hermes.