Investors flee Scotland ahead of independence referendum

Tim Wallace
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Alex Salmond leads the Yes campaign
Businesses are diverting investment away from Scotland and into other areas like the north of England because of the uncertainty around September’s independence referendum, PwC bosses said yesterday.

And the business services group’s chairman Ian Powell added that being part of a larger trading bloc will be beneficial for the UK and Scotland, particularly in global negotiations.

However, PwC has not taken a formal stance on independence, maintaining it is up to the voters to decide.

“People are holding back on investment until they know the result – they would rather invest where there is less uncertainty,” Powell said, noting the overall effect has been relatively small so far.

His concerns extend to the UK’s place in the EU.

“Look at China – if it is negotiating with the EU, it is a more equal debate,” Powell said. “If you break that into individual territories it will be harder.”

Meanwhile, UBS warned that Scottish banks can expect to lose out on deposits if the country votes to leave.

UBS analysts compared Scotland’s position to that of Slovakia, as Czechoslovakia broke up, and Quebec when it held a vote on splitting from Canada.

“In a scenario where there is even a possibility that Scotland could have anything other than full monetary union, we believe Scotland is likely to be perceived as the weaker part of the sterling area,” said economist Paul Donovan.

“On that basis, aversion on the part of depositors may lead to savings shifting rapidly.”

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