Scottish Referendum Result Reactions

by | Sep 19, 2014

Share this article

Facebook Open Graph

Reactions to the Scottish Independence Referendum result are coming in thick and fast, and here we offer a quick round-up of what’s reached the IFA Magazine City Desk so far.

Please add your comments below. What do you think, will it affect your business, are you an IFA in Scotland with an opinion, let us know now.

Martin Gilbert, chief executive of Aberdeen Asset Management:


“The campaigning is over and UK investors will welcome a reduction in the uncertainty of recent months. Tomorrow attention will turn again to the situation in Ukraine, the conflict in the middle east and the fragile European economy.

“Both sides of the independence debate now need to come together so that from today, Scotland moves forward united.  Scotland has long been a world leader in business sectors such as oil and gas, whisky and investment and the task now is to grow  the rest of the economy with the strong support of politicians of all parties.

“As I’ve said before, whatever the outcome of the referendum, Scotland can have a prosperous future.”


Barry Davis of PlutusFX:

“If Alex Salmond has not resigned by the time you read this, then it must be coming soon. If he wanted to win over the electorate he had to have negotiated a credible policy that had been agreed by all counterparties with regard to Currency, EU membership and NATO. He failed in all these crucial areas, leaving everything up in the air. FTSE up, GBP up, Salmon out.”

Mark Dampier, Head of Investment Research, Hargreaves Lansdown:


“From an investor’s perspective, it is a relief to resolve this uncertainty and the markets look to react accordingly. Investors can continue to manage their savings, investments and pensions just as they did before the referendum. The UK remains one of the most stable countries in the world in which to invest and conduct business.

“As a rule, investors should not make knee jerk reactions to these sorts of matters. Companies have a tendency to survive whatever politicians and economics throw at them, just look at Europe as an example. Big falls and rises are often come close together and investors on the side-lines risk missing out.

“It remains business as usual – it’s highly unlikely there will be any real devolution work done until after the general election, there will be plenty of time for companies to adjust to any changes, investors have no need to make quick decisions based in all probability on immediate analysis.

“In the longer term there may be changes to investment rules and practices following further devolution but for now, the party conferences and the forthcoming general election will be the main focus of attention.”

Tom McPhail, Head of Pensions Research Hargreaves Lansdown:

“Westminster politicians have been given a scare and the fact that UKIP and the Scottish Nationalists are giving them a run for their money is a challenge to which they need to respond if they want to gain ground in the General Election next May. Expect to see bold and eye-catching policy announcements around tax and social justice. Investors who have the means to take advantage of tax breaks on pensions should make the most of them while they can.

“In the longer term we expect devolution of powers from Westminster to Scotland (and potentially other regions too). This could lead to regional tax powers – Scotland already has limited powers to vary income tax – which could in turn impact on pensions and other savings plans, however we wouldn’t expect to see any change this side of the general election.

“State Pension levels and qualification ages will apply across the UK in accordance with the government’s existing plans. Scottish pensioners will now be denied the possibility of drawing their state pension a year or two ahead of their counterparts in the rest of the UK.

“The government’s plans for the pension freedoms announced in the budget will all be implemented this side of the general election and remain on track.

“On annuities this news is likely to boost confidence in the UK economy. In turn this could lead to earlier expectations of interest rate rises however such questions have been fiendishly difficult to predict in recent years. Investors who decide they want to buy an annuity should make sure they shop around for the best possible terms, as it can boost their retirement income by 20%. Anyone who prefers to defer buying an annuity, whether for a few months or for the long term, can use a low cost drawdown plan to access their retirement savings.”

Jason Hollands, Managing Director at private client investment and financial planning group Tilney Bestinvest:

“After an incredibly close fought race politically, the people of Scotland have rejected independence. Although the polls were narrow in the closing days, when it came to the weight of research and views from financial institutions over the economic impact of independence it was never neck and neck at any point. Commentary from institutional investors has been overwhelmingly bearish about the economic impact of independence for both Scotland and indeed on the rest of the UK.

“Markets hate uncertainty and therefore with a victory for the “no” vote, it is unsurprising to see sterling rally after the pressure it has been under a recent weeks. When the stock market opens we also expect to see a relief rally in those Scottish listed businesses which have been on the receiving end of nervous sentiment in recent days.

“While the major uncertainties around a potential splitting of national debt, the currency and Scotland’s EU membership will quickly evaporate, attention now turn to the yet to be fleshed out ‘devo-max’ proposals and the blowback for the rest of the UK.

“The extent to which Scotland will be able to set its own tax rates will be of particular interest to our clients in Scotland but ‘devo-max’ will prove a watershed moment that opens the way for greater federalisation across the UK.”

Alan Wilde, Head of Fixed Income – Global, Baring Asset Management:

“Scotland has decided ‘no’ – the big question is what happens now. In the financial markets there will be collective sigh of relief as a period of huge uncertainty has been avoided.  This will calm markets, which had become increasingly nervous in the last few weeks.

“Sterling has taken the bulk of pressure and a recovery to $1.65 or so seems plausible though upside potential may be limited as sterling has actually been stronger than other major currencies such as the €uro and Yen as the US dollar has rallied hard.  For Gilts, which have outperformed US Treasury bonds, there could counter-intuitively be some downside with the Referendum out of the way: one consequence of a Yes vote was that Bank of England (BoE) Governor Carney was expected to go slowly tightening UK rates.  This outcome may now lead markets to focus back on growth and conclude that the UK economy needs some modest restraint and that the BoE will be ahead of the US Federal Open Market Committee raising official rates.

“Once the dust has settled, attention will turn to the political consequences of such a long and divisive Referendum campaign.  Concessions by all major political parties to sweeten a No vote give more devolved powers to Scotland and greater latitude to control its own budget.  Already there are some Westminster MPs who are unhappy that such promises have been made and it is to be expected that this issue will be very sensitive the closer we get to the May 2015 UK General Election.”

James Priday, Director, Prydis Wealth:

“I of course welcome the ‘No’ vote. This appears to be echoed by others with the immediate pick-up in the FTSE. It is, however, more of a sigh of relief than elation. While I see the continuation of the Union as a great thing – particularly the fact that years of political and monetary uncertainty have been avoided – it feels like an anti-climax as in effect today is the same as yesterday, just without one more uncertainty influencing asset prices.”

Patrick Reeve, Managing Partner of Albion Ventures: 

“Around 10% of Albion’s investments by number are based in Scotland, so the referendum result is a big relief, not least because it provides a degree of certainty on the broader political, economic and legal context in which those companies operate. A yes vote, however, would have resulted not only in uncertainty in all these areas for as much as half a decade, but also a legacy of bitterness  over what would inevitably have been a very messy divorce, which could have lasted a generation. We would have certainly pulled all our money out of Scotland.”

Neil Williams, Group Chief Economist, at Hermes Investment Management:

“Scotland’s vote to stay part of the Union removes a potential ‘curve ball’ for financial markets, and will hopefully now allow much of the uncertainty to ebb away. Details about the extent of any new devolved powers need to be thrashed out, of course, but the short-term rally in sterling, and other UK assets suggests a modicum of relief.

“Had a ‘yes’ been delivered, the threat of the UK ‘losing’ 8% of its GDP (circa £129bn), together with Scotland’s top-heavy bank-assets-to-GDP ratio, the risk of capital flight, the need to divvy out the oil, and 12-18 months of political uncertainty would have jolted the pound.

“But, even that should not have caused crisis, given the UK’s economic fundamentals have been strengthening, and becoming broader based.

“Gilts in the event of a ‘yes’ vote may have underperformed other bond markets in the short term, though with the Debt Management Office (DMO) helpfully guaranteeing all gilts payments, any risk of default or restructuring always looked next to zero.

“The spotlight may now shift onto the policy-making powers of the regions, and the extent into next May’s general election of any perceived fiscal slippage. The tensions arising from a monetary union bereft of sufficient fiscal union are still being suffered in the euro-zone. These need to be avoided in the UK.

“Bank of England (BoE) monetary policy will be unhindered by today’s developments. With UK GDP growing around ‘potential’ and about to be revised up, inflation probably troughing, and the MPC mindful of bubbling house prices, the first, 25bp rate hike could yet come as early as November, though BoE caution means next spring is looking increasingly likely.”

Phillip Bates, Principal at Cheshire accountants Phillip Bates & Co:

“I breathed a big sigh of relief this morning after waking to the news that Scotland had said No. The economic and social carnage that would have followed a Yes vote brought a cold shudder to me. Throughout the debate I felt that the major uncertainties associated with an independent Scotland around currency, admission to Europe and the extent of loss of jobs and income to Scotland as significant businesses moved south of the border would be so substantial that “No” would prevail.

“It is surprising the vote was as close as it was given the lack of clear financial information on the expected assets and liabilities, future income and expenditure of a Scottish nation. It is scary to think that the future of our Union could have changed with a swing of 5.3% of those who voted – only 192,000 people or two and a bit times the capacity of Wembley Stadium. The feelings of frustration, isolation and impotence  of the Scottish people with their lives controlled from a distant Westminster and a Government not understanding their position or needs has undoubtedly been a major reason for the dissatisfaction.  Similar frustrations are found in the North West and no doubt other regions outside the South East.  Those frustrations and the West Lothian question need to be addressed as urgently as the need to devolve powers to Scotland.”

Duncan Jones, Investment Director at Investor First Limited:

“The argument rightly focused in the end on the real economics of independence. For that reason the NO vote produced the right outcome. However, I do admire the sense of unity in the Scots and I can only hope it will spill over into the English now. It may not have produced the outcome the SNP hoped for but there should be no sense of failure on their part. An exciting experience to witness. Will it be replicated in the European referendum in 2017?  One can only hope so as that decision is even more momentous surely.”

Guy Ellison, Head of Equities at Investec Wealth & Investment:

“Following a knee-jerk bounce in Sterling and UK equities, the relief will be tempered by lack of clarity on the real consequences of further devolution of powers to all UK regions. For now however, it is business as usual – and from an economic backdrop the outlook for the UK is relatively strong. The result is also a tonic to financial markets in Europe – where politicians in Spain in particular will be relieved that Catalonian secessionist fires have not been further stoked.”

Ian Warwick, CEO at Deepbridge Capital:

“We are delighted with the result as it allows us to now progress plans to invest further in Scotland. Scotland is full of great entrepreneurship and innovation and a is great area for renewable energy projects – all of which require investment, which we can now continue to facilitate.”

Anthony Doyle, Investment Director at M&G:

“Scottish voters have decided to remain part of the United Kingdom. The result (55% No / 45% Yes) is much more benign than what had been priced into sterling over the past two weeks.

“The “No” outcome ends the uncertainty over the future direction of fiscal and political stability in the UK that had developed over the last two weeks since a poll suggested that “Yes” was a likely outcome. The immediate bond market reaction has been front-end driven, as investors have begun to re-focus in the prospect of a tightening of monetary policy (currently priced in for February 2015). The UK economy appears to be in relatively robust health with the unemployment rate falling to 6.2% in July and consumer price inflation at a comfortable 1.5% level, allowing the Bank of England some breathing space in terms of any possible rate hike.

“The outlook for corporate bonds remains favourable. Helped by a low default rate, we expect spreads can tighten back to their levels in 2005/07. Our current preferred segments include BBB rated corporates, where UK credit looks to be a sound risk-adjusted investment at this point in the cycle. In the high yield market, we believe the environment remains favourable and think that there is only a low probability of the default rate rising in the short term.

“In currency markets, sterling has strengthened on the back of the election result and the currency market is now likely to refocus on incoming economic data after the election induced volatility of recent weeks.”

Alan Steven, Director at Portfolio & Pension Management Ltd:

“Reading the previous contributions, there are two points that I would contest: a. Scotland is not being offered “devo max” – more likely “devo min”; and, b. “markets hate uncertainty” – I disagree, markets thrive on uncertainty – you don’t make a lot of money on certainty.”

Gordon MacLean, Independent Financial Adviser at Highland Financial Services:

“It is fantastic, you can see from most news clips that the “yes” voters had voted with their hearts and not their heads. A militant left wing government would have destroyed the Scottish economy and thankfully this has been avoided.”



Share this article

Related articles

UK businesses record a 55% increase in sick leave

UK businesses record a 55% increase in sick leave

New analysis of over 1,700 businesses has revealed that the average business has seen a sharp rise in sick leave - with 55 percent more days lost in the last four years due to short and long-term illness. The Sick Leave Report 2024, conducted by HR systems...

Sign up to the IFA Magazine Newsletter

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, that fits perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode