The political fallout from a Scottish vote for independence could have major ramifications on the UK’s membership within the European Union, according to Schroders.
The group’s European economist Azad Zangana said the political impact of Scottish independence would be “huge” for the UK adding the move would “almost guarantee a referendum on the UK’s membership of the EU.
“The Labour party, which currently leads in opinion polls for next year’s general election, could lose up to 16 per cent of its seats, making it much more likely that the Conservative Party wins an outright majority,” Mr Zangana said.
“What is not being appreciated by investors at the moment is that this would almost guarantee a referendum on the UK’s membership of the EU, and without Scottish voters involved, we are more likely to see a vote for ‘Brexit’.
“According to a YouGov poll conducted in December 2013, UK (excluding Scotland) would see 46 per cent voting to exit against 37 per cent voting to remain in the EU, while 50 per cent of Scotland would want to remain members, against 34 per cent in favour of leaving.”
Mr Zangana said any negotiations following a potential ‘yes’ vote would “undoubtedly be messy” and “potentially damaging for the reputation of both countries”.
“In the event of a ‘no’ vote without a significant margin, the issue is likely to remain for many years which will prompt investors to place a risk premium on dealing with Scottish entities,” he added.
