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Scottish Referendum

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Introduction
One major event that took place in the latter part of 2014 was the vote on whether Scotland was to continue being a part of the UK – the Scottish Referendum. The vote took place on the 18th September 2014, with 84.6% of the Scottish population voting. The question that was asked to voters was ‘Should Scotland be an independent country?’ The result of the vote was 55.5% voting ‘No’ and 44.5% voting ‘Yes’ (The Scottish Government, 2014). The result of this vote had potentially harmful repercussions for many country’s monetary and financial systems, including the UK. This report will critically evaluate the impact that the Scottish Referendum has and may have for the UK.

In order to fully understand the topic, a brief history of …show more content…

If Scotland was granted independence, this could have had an extremely detrimental effect on their economy when fluctuating oil prices are considered.

In hindsight the fact that Scotland stayed in the UK has helped them out massively due to the major decrease in the price of oil. In January the price of oil dropped to the lowest ever in six years, which caused a £6 billion hole in Scotland’s finances. However the fact that Scotland stayed in the UK meant that automatic stabilisers within the kingdom meant that the price of oil had little effect on Scotland as a country, and the effect of this price drop was spread throughout the UK. A quote from an article in The Telegraph (2015) suggested that the oil price drop would have left public spending budgets deflated.
Currency and Interest …show more content…

With a stable currency and political harmony, it’s estimated that the gilt yields would sell for 0.75pc-1.65pc more than UK bonds (The Telegraph, 2014). However this would only be the case if Scotland achieved a stable currency, which initially would be very hard to do. The chance of higher returns on bonds may seem appealing to some investors, however there are risks involved, for example the savings may be in a weaker currency and could lose value when converting savings back into

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