Posted September 12, 2014 Ashley Chadwick
With the Scottish independence vote coming up on September 18th, there has been a lot of volatility surrounding some British markets. This has particular been seen in the value of Sterling. Uncertainty over the outcome of the vote, as well as uncertainty over what currency an independent Scotland would use has hit the value of the Pound.
In the run up to the vote, polls were published showing the yes campaign slowly growing in support and some polls were showing a small majority in favour of independence, whilst just a month before fewer than 30% were saying yes. Until this people had not been expecting any chance of Scotland achieving independence, but now people are taking notice. Carney and Osborne have both said an independent Scotland would not be allowed to use the Pound as their currency, but Scotland want to keep the Pound, or would at least peg it to the British Pound. Uncertainty over this saw Cable fall from 1.68 to 1.61 in under a month. However, more recent developments have seen a recovery in the Pound, bouncing back to above 1.63. This was after polls showing the No campaign with a narrow lead and undecided voters holding the key. Also, Betfair, paid out on all its No bets, betting sites often are very accurate at predicting political outcomes, so this was more than just a publicity stunt and is in line with the general consensus that on the day, Scotland will say No to independence.