Scottish independence: Markets rally after 'No' campaign victory in Scotland
The pound and shares surged after the people of Scotland voted by a clear majority to remain part of the UK.
Sterling shot up another 0.86 cents to $1.6469 and the FTSE 100 was 39.72 points higher at 6859.01.
The pound had hit a low of $1.60 just nine days ago on worries over the vote. It also reached a two-year high of 78.1p against the euro today.
“The ‘no’ vote removes the huge political and economic uncertainty of untangling the 307-year-old union. A large, downside risk to UK growth has lifted,” said strategists at HSBC.
Gilt yields rose on the news with those on two-year Government debt hitting nine-week highs.
High Street banks were among the best-performing shares and several rushed out statements to reassure customers it was “business as usual”.
Royal Bank of Scotland halted contingency plans to move it headquarters to London in the event of a “Yes” vote.
It said: “The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a ‘Yes’ vote.
"That contingency plan is no longer required. Following the result it is business as usual for all our customers across the UK and RBS.”
Lloyds Banking Group also shelved any plans to move. It said: “We have always said this was a question for the Scottish people and we would respect the outcome of the referendum.
"We remain fully focused on supporting households and businesses in Scotland as well as right across the rest of the UK.”
Shares in RBS, which is still 81% owned by the taxpayer, jumped 12.9p to 370.1p while Lloyds shares — 25% owned by the taxpayer — were 1.62p higher at 77.49p. That is good news for Chancellor George Osborne who is keen to sell another chunk of Lloyds shares before the General Election.
Also up were Scottish companies including energy giant SSE (up 2.1%), Weir (1.5%), Standard Life (up 0.9%) and Aberdeen Asset Management (0.7%).
Schroders economist Azad Zangana said: “The news will come as a relief for investors and markets.
"The prospect of months of messy negotiations, uncertainty over the division of national assets and debt, and the currency arrangements of an independent Scotland had been weighing on the confidence of investors over the past few weeks, especially as polls had tightened.”
