The sudden surge in support for Scottish independence has triggered a rash of new and reheated research notes from the City’s population of economists and analysts.
Rob Wood of Berenberg points out the YouGov poll that showed a majority of Scots now supporting independence remains an outlier, and still feels that a ‘No’ vote against independence is the most likely outcome.
“YouGov is an outlier so far,” he said.
“Two other polls have been taken since the August 25 televised debate between Scottish first minister Alex Salmond and Alistair Darling, leader of the anti-independence campaign, and neither shows anywhere near the same tightening as YouGov.”
Michael Saunders at Citi said he is still leaning towards a narrow ‘No’ vote, but he argues that the outcome now looks too close to call with confidence, and highlights the momentum of the ‘Yes’ vote.
“A ‘Yes’ vote would create considerable economic and political uncertainties for the UK, which would not fade quickly, in our view,” he said.
“There are uncertainties over the currency arrangements and fiscal position of an independent Scotland, over the large Scotland-based banks, and over Scotland’s future EU membership.”
Kit Juckes of SocGen stressed that a downside risks remain “substantial”.
“We believe that a ‘Yes’ poses more questions than it answers, and this will be negative for sterling, perhaps to the order of 5 per cent overall,” he said.
“It would increase moves for secession across Europe, increase the momentum for the UK to leave the EU and hurt Scottish economic growth potential.”
Dominic Bryant at BNP Paribas points out that even a slender ‘No’ vote next week could still cause longer-term problems.
“A slim No vote means the issue of Scottish independence will remain a source of tension in British politics with potential spillovers to the economy, particularly for Scotland, but to some extent on the rest of the UK,” he said.
“Longer-term business/investment decisions would be made more difficult. There may be reduced willingness to hold sterling assets given persistent uncertainty over the durability of the Union.”
