Sterling sustains strength as First Minister Nicola Sturgeon signals second Scottish referendum

 
Jasper Jolly
Keynote Speech By New Leader Of The SNP Nicola Sturgeon
Source: Getty

Markets have stayed steady despite First Minister Nicola Sturgeon announcing she will seek a second referendum on Scottish independence.

Against the US dollar sterling was broadly unchanged at the time of publication, sustaining gains of around 0.48 per cent, after reaching highs of $1.2240.

The FTSE 100 meanwhile did not give up any gains, remaining 0.28 per cent above its opening level at the time of publication.

Read more: Nicola Sturgeon to seek second referendum on Scottish independence

The yield on the UK’s benchmark 10-year government debt continued to climb from today’s low point this morning, but remains below its early morning level. Yields move inversely to prices.

Sturgeon said she would seek approval from MSPs next week for a vote. The vote will likely take place between autumn 2018 and spring 2019, although Sturgeon said the exact timing would be up to the Scottish Parliament.

A second independence referendum could put pressure on the pound as it threatens to complicate the process of Brexit even further.

The currency itself is set to be one of the central issues in the independence debate, with questions about what currency Scotland will use if it leaves the United Kingdom.

Read more: Is Nicola Sturgeon deluded to think Scotland can get a special Brexit deal?

Craig Erlam, senior market analyst at Oanda, said: "The announcement hasn’t come as a major surprise, with the SNP making their feelings repeatedly known since the EU referendum last June after the majority of the country voted to remain only to be dragged out kicking and screaming.

He added: "What is confusing is the timing for the new referendum, with Sturgeon claiming that it should happen between Autumn 2018 and Spring 2019, prior to the two years of Brexit negotiations being completed. This effectively means that even if the negotiations go perfectly to plan, which they likely won’t, the Scottish people won’t know what they will actually be voting for."

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