We are waking up this morning to a united United Kingdom, with the people of Scotland rejecting an opportunity for independence.
With only one council left to declare, it is 55% ‘No’ to 45% ‘Yes’, with the declaration by Fife shortly after 6am confirming the result.
What happens next, politically at least, is the drafting of new legislation to devolve more powers to the Scottish government.
These draft laws will be published in January, and former BBC governor Lord Smith of Kelvin has been appointed by David Cameron to lead the devolution process.
Cameron has also confirmed this morning he will resolve the issue of Scottish MPs voting on English issues, the so-called West Lothian question.
But what does a No vote mean for the investment markets?
Pound Sterling has already risen sharply, reaching a two-year high against the euro and a two-week high against the US dollar.
The FTSE 100 index of leading UK company shares is expected to open higher this morning and could well set a new all-time high now that the question of Scottish independence has been answered.
Listed companies with links to Scotland, including such as RBS, Lloyds, Standard Life and Aberdeen Asset Management, are all expected to perform strongly following the news.
Commenting on the results of the referendum, Paras Anand, Head of European Equities at Fidelity Worldwide Investment, commented:
“The first point to acknowledge is that whilst yesterday’s vote represented a focal point, in truth it is better considered as a stop along a journey where the direction of travel had already been long established.
“In many ways, the eventual success of the unionist campaign can be credited to a reframing of the ‘No’ vote as a vote for home rule, underlining the fact that, with the emotion stripped away, the two sides of the argument had always been much closer than either would have cared to admit.
“We have argued that assessing the potential impact of the Scottish vote on markets requires two things: the first is to understand the point above and the second is to look at referendum in the context of the UK political environment more broadly.
“In this context we could find that the mood surrounding the outcome of the vote may be short-lived as the focus turns quickly to the potential details and consequences of ‘devo max’.
“Additionally, given the sense as we approached the referendum that the outcome was impossible to call, this perspective will carry over to the upcoming general election and, in the case of a Conservative government prevailing, the referendum on EU membership.
“Hence, we could expect to see and extended period of sterling weakness, especially relative to the US Dollar.
“This, we believe would be a welcome development for the UK corporate sector overall given the large proportion of revenues and profits that are earned overseas and hence supportive for the markets overall.
“Moreover, whilst this atmosphere of political instability dominates, it is difficult to see how we will experience anything more than modest increases in short rates over the coming years which should, at the margin, be beneficial for the domestic economy overall.”
