- • Scotland votes to remain within the United Kingdom
- • Europe boosted by idea that it will remain united
- • Focus now moves towards the devolution of powers as promised by David Cameron
European markets are waking up to a historic decision by Scotland to reject independence, bringing with it a guarantee of a stable United Kingdom and a reduction in the likeliness that Europe will see a raft of breakaway states form.
This vote has shaken the political spectrum within the UK and whilst a decision to remain within the Union has been made, there is no doubt that a drive towards change for regional powers which should shape politics for the foreseeable future.
However, the important step ahead is clearly going to involve a discussion between both Yes and No campaigners to appease the inevitable feeling of unhappiness amongst the 1.5 million plus voters that chose to take the step and vote for independence.
The story does not end here, with plans for further devolution to be discussed as early as October, which is going to be followed by a white paper in November and finally, some new laws are expected to pass by January 2015.
The issues at hand are wide ranging and dependent upon the degree to which power is devolved, will be likely to appease many within the Yes campaign. This includes the control of factors such as income tax, VAT, benefits, air passenger duty, inheritance tax, capital gains tax and benefits as a whole. The question now is whether this will act as a spark to drive increased calls from the likes of Wales and Northern Ireland to gain the same powers.
That being said, despite the loud campaign for independence gaining significant numbers over the recent weeks, it is clear that a strong majority are unwilling to leave a Union that provides Scotland with more revenue than they put in.
The fact of the matter is that the Union is bigger than the sum of its parts and Westminster will be buoyed by the news that their influence will remain strong in the world whilst the Scottish can be happy knowing that they voted for stability and prosperity rather than uncertainty on several absolutely key issues.
The news is also going to be welcomed by the Europeans, who have been fighting against the idea of breaking up ever since Mario Draghi’s “whatever it takes” speech. Given the feeling that an independent Scotland would lead to an inevitable fight for similar steps to be taken in breakaway regions such as Catalonia and Bavaria, today’s vote is a major boost for the European project as a whole.
Markets have been responding in a somewhat predictable manner in line with the somewhat smooth election process which at no point looked providing a win for the independence.
Despite this, GBPUSD has been moving higher overnight, gaining over 1% today alone, which actually failed to match the gains seen yesterday, showing that markets have strongly.
DISCLAIMER: Any views or opinions presented are solely those of the author and do not necessarily represent those of Alpari (UK) Limited, unless otherwise specifically stated. This content does not constitute investment advice.