By Gokhan Kurtaran
LONDON
Anxiety is growing in Scotland’s financial sector as industry professionals ready themselves for any poll victory that will see Scotland move away from the United Kingdom.
In recent days, some companies based north of the border have announced that are considering a move to London in the case of a "Yes," amid concerns as to how that would affect European economies.
Michael Howell, the managing director of London-based Cross Capital, told the Anadolu Agency this week that in August alone approximately $27.3 billion flew out of the UK due to independence worries.
Furthermore, he says, this amount is expected to increase should independence be ratified.
“The money is mainly going into the U.S. dollar because of the concerns,” he said.
“If there was to be a 'Yes' our expectation would be you would probably get a Sterling/USD [exchange rate] perhaps to below $1.60, likely to $1.57,” said Howell, estimating intervention from the Bank Of England if the rate wanes to $1.57 levels.
“In the event of a 'No' vote then sterling would increase to maybe around $1.65” Howell added.
Adding to pressure on the British pound is that institutions based in Scotland such as Standard Life, Lloyds Banking Group, Royal Bank of Scotland and TSB Banking Group have announced they plan to move to London if Scotland says "Yes" September 18.
According to figures from the London-based Investment Management Association, Scottish finance companies control funds worth $907 billion. It is estimated that there are more than 500 portfolio management firms in Scotland.
“The 177,000 people in Scotland who work in the financial and related professional services sector also need to know what is at stake,” Chris Cummings, the chief executive of TheCityUK told AA, warning that the result of the referendum would affect the lives of many.
“These jobs are in banking, insurance and asset management, as well as in the supporting services of accountancy, consultancy and the law," he said, adding that banking employs more than 40,000 people in Scotland, and related professions employ more than 80,000.
Adding further pressure to the "Yes" vote is that representatives of financial sector see uncertainty over a change in regulatory bodies overseeing finance companies as a main concern in the case of a possible independence outcome.
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