Analysts at Citi believe the results of the Scottish elections during the previous week’s will see some of the more acute near-term risks ease.
Key to that judgement were the SNP’s failure to obtain an outright majority and the UK government’s decision not to rule out a second referendum.
Nevertheless, in their opinion Westminster’s de-facto position was against another vote.
For her part, Nicola Sturgeon did reaffirm her commitment to another plebiscite, but suggested that the legislative push for it would wait until the start of 2022, when Covid-19 challenges were expected to have abated.
Looking out to the longer-term however, “the key factor here is likely to be the ‘blame game’ between Westminster and Holyrood. Results from the local elections in England suggest cultural views articulated by Brexit remain a driving electoral force.
“Associated Conservative gains may incentivise more persistent fiscal support and a confrontational approach to the EU.”