The final day will arrive on Friday and voters will show their final decision and traders will be put out of their misery. But, what is important to know is what will be the outcome of this vote. One thing which is certain for me that there is strong possibility that if we do get a Yes vote, another referendum could take place. In the short term a Yes vote could put a lot of pressure on Sterling against the basket of currencies. If we do get a No vote on Friday morning then this mean that the talks about the strength in the UK economy will be back once again and if we are going to see an increase in the interest rate.
The biggest worries for the time being under the situation of NO is that what currency Scotland will use because there is huge debate on this that Scotland will not be allowed to use Sterling. So, if Scotland does use a different currency they may have to devalue the currency which can have its implication on the UK economy. A cheaper currency always attract export and labour market from employer point of view which could hurt UK.
The debate of UK leaving the EU has taken the back seat for the time being , but will it remain there for long, no certainly not. And a No vote can actually increase the chances of UK leaving the EU because of no supper left of labour and conservatives coming back on top position. That itself calls for a huge volatile situation for pound given the isolation it will have from Europe. But a No vote could increase the chances of keeping the UK in EU.
The financial sector could also see a massive change in structure as a result of NO vote. For instance we have heard the comments from RBS, Lloyds and other institutions moving their offices to Scotland. We are talking about thousands of jobs leaving Scotland and going to UK. The purpose built buildings could remain vacant for some time. But obviously, at the same time, we may also see new institutions forming and emerging with much better condition.
The spill over effect is something which we should keep in mind when we are talking about referendum in Scotland. The movement could start a spring of similar events around Europe which could bring more independent countries on the planet.
Most importantly, if Scotland does go on its own way, they could struggle for some time before they can will be allowed to join, and that is if, they will be allowed to join EU. But, given that Scotland is the biggest producer of energy in the UK and hold’s 96% of crude oil in the UK, the bargain power could be a lot more stronger if they want to join EU.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.