Sterling rises and European share markets celebrate as worries that Scottish secession would undermine UK growth are laid to rest - for now, at least. Ivor Bennett reports.
It had looked shaky in recent weeks. But as the no votes flooded in, sterling soon strengthened. Jumping to a two-week high against the dollar and a two-year peak against the euro as Scotland spurned independence. IG's Chris Beauchamp. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "I think the most important thing is the removal of uncertainty. You're not going to have 18 months of negotiations over the pound, over the currency, over the debt-sharing, all the other issues that go with it so that's why you're seeing sterling rising against the dollar and against the euro this morning." The rally did not last long though. as profit taking soon took precedence. SOUNDBITE (English) CHRIS BEAUCHAMP, MARKET ANALYST, IG, SAYING: "I think we've seen it run out of steam at 1.65 this morning and I think the economic fundamentals argument now reasserts itself. You could make a case for saying that a rate hike is now more likely in 2015 with the Bank of England not having to worry about independence. But actually it's about the dollar really and the strength we're seeing in that currency, and that will weigh on sterling, pushing it back down towards 1.63 and possibly below as well." London's FTSE index also hit a two-week high. But market reaction was fairly muted with the result largely priced in. SOUNDBITE (English) IVOR BENNETT, REUTERS REPORTER, SAYING: ""Well the market's been open for over an hour now and the mood is not quite a euphoric one, but more one of quiet relief. Stocks, equities are gradually moving higher, and the biggest movers of course, are those with Scottish links." Banks in particular lead the way. RBS rising as much as 4 percent in early trading as uncertainty over relocation quickly evaporated. While the vote itself was conclusive, uncertainty still lingers over what comes next. Kathleen Brooks from Forex.com. SOUNDBITE (English) KATHLEEN BROOKS, DIRECTOR OF RESEARCH, FOREX.COM, SAYING: "What I heard from Cameron today is that we've moved away from Scotland and independence for Scotland, towards devolution for England which is a completely new thing that we're all going to have to digest and figure out what that actually means over the next few months and that could have repercussions for UK markets definitely." What's more, Scottish nationalism is unlikely to end here. Pending reelection, David Cameron has promised a UK-wide referendum on EU membership. Should that happen, Scotland may well want to try again for independence.