LONDON (AP) – Scotland’s decision to reject independence from the United Kingdom gave British markets a short-term lift Friday but worries over future constitutional changes kept a lid on the relief rally.
The No campaign won 55.3 per cent of the votes cast in Thursday’s referendum against 44.7 per cent who backed independence. The margin was wider than expected – most opinion polls on the eve of the vote were predicting a narrower four-point victory for proponents of the union with England, Wales and Northern Ireland.
Investors breathed a sigh of relief that a host of thorny economic issues were not triggered by a Yes vote. The FTSE 100 index of leading British shares ended up 0.3 per cent at 6,837.92 but had been higher earlier in the session.
As well as worries over what currency an independent Scotland would use, investors had concerns over how the UK’s 1.3 trillion pounds ($2.1 trillion) debt would be split. There were even fears that a Yes vote may have triggered a bank run. The uncertainty was so great that Bank of England Governor Mark Carney flew back early from a summit in Australia.
“It might not have been financial meltdown territory, but the markets almost certainly would have been in turmoil if the Scots had voted yes,” said Dennis de Jong, managing director at UFX.com.
Those companies with Scottish connections outperformed the general market. Among them, Royal Bank of Scotland PLC closed up 2.5 per cent, while Lloyds Banking Group PLC rose 1.3 per cent.
Royal Bank of Scotland, which is majority-owned by the UK government since receiving a bailout during the financial crisis in 2008, said it was abandoning a contingency plan that included moving its head office down south to England.