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A poll north of the border could have implications for a potential referendum and spook markets
Thursday 06 May 2021 Author: Tom Sieber

Across the UK voters go to the polls today (6 May) with investors’ attention likely to be focused on voting for the Scottish parliament – with the SNP looking to secure the majority it can claim as a mandate for a new independence referendum.

Polling suggests the outcome is on a knife edge. The SNP could remain in power but having staked so much on getting a majority, the market is likely to sit up and take notice if it does.

Once seats won by the Green Party and, potentially, former SNP leader Alex Salmond’s newly launched Alba Party are counted there could be more pro-independence MSPs in the chamber than not, regardless of whether the SNP itself gets to a majority.

The Conservatives at Westminster have suggested they would resist any calls for a new independence vote, but they may come under significant political pressure to revisit this position, particularly if the SNP secures its mandate.

The impact this might have on the UK stock market can be judged by looking back at the run-up to the 2014 independence referendum.


At the time, a potential break-up of the union, with a shock poll showing support for ‘yes’ causing jitters on the eve of the referendum, triggered a significant slump in the pound.

Arguably a split now would be even more disruptive thanks to Brexit. This is because Scotland hopes to be a member of the EU, raising the prospect of a hard border between Scotland and England.

The SNP might hold an unsanctioned vote or push for a referendum in 2021 so questions around the ownership of UK’s natural resources, plus the administration of UK pensions and the NHS would likely be ones for the longer term.

Even if a poll was held and a ‘yes’ vote was secured, full independence would likely be some way off.

However, the uncertainty created by an SNP majority might well have an immediate impact on sterling as well as those companies with headquarters or significant business operations in Scotland.

Banking group NatWest (NWG) has already said it will relocate its base from Edinburgh to London in the event Scotland voted to be independent.

Utility companies might face the loss of state support for renewable energy projects in the event Scotland exits the UK, while defence contractors BAE Systems (BA.) and Babcock (BAB) both have operations on the Clyde which could be impacted by Scottish political turmoil.

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