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Get your money out of Britain



  • Value of the pound could plunge by 15% in the event of a 'Yes' vote
  • Japan's top bank Nomura advises investors to brace for sterling collapse
  • Separation of union after over 300 years would be a 'cataclysmic shock'
  • Jitters saw the pound fall to a 10-month low against the dollar yesterday 
  • Shares in major Scottish businesses also tanked amid a surge for 'Yes'
  • Sterling continued to fall today as second poll puts referendum on knife edge

International investors have been warned to pull their cash out of Britain to protect themselves against the 'cataclysmic' impact of Scottish independence.

Japan's biggest bank, Nomura, warned sterling could plunge by 15 per cent in the event of a ‘Yes’ vote – amid warnings over a ‘run on UK assets’ threatening savings and pensions of ordinary families.

It came as it emerged David Cameron has pleaded with business chiefs to publicly warn against Scottish independence.

The Prime Minister asked company bosses at a Downing Street drinks event last night to 'highlight the dangers of a Scottish exit in any way we can'.

Among those who attended last night’s reception at Number 10 included Sir Richard Broadbent, the chairman of Tesco and Baroness Brady, the West Ham United vice-chairman.

One company chief present told Sky News: ‘The PM emphasised the need for us to do everything we can over the next nine days to keep the union together. He wants us to highlight the dangers of a Scottish exit in any way we can.’ 

Mr Cameron's growing concern over the future of the union came after a YouGov poll this weekend put the independence campaign ahead for the first time – with 51 per cent of Scots now planning to vote for separation.

Following the news, sterling fell to a 10-month low against the dollar yesterday while shares in major Scottish businesses tanked.

The pound continued to fall today as a second independence poll put the Yes and No camps neck and neck. 

Jordan Rochester, Namura’s foreign exchange strategist, said: ‘We could see a lot of money being pulled out of UK investments. Sterling could fall at least 15 per cent in a worst–case scenario. These are scary times.’

Russ Koesterich, chief investment strategist at the largest fund manager in the world, BlackRock, added: ‘Everybody has been focusing on geopolitics, with issues in the Ukraine and the Middle East... but this is the one thing they were not looking at.

‘Up until now this was not on the radar of many investors, certainly not in the US, and if it was people assumed this vote would not pass.

‘If the Yes vote passes, then investors would have to accept a prolonged period of uncertainty for UK assets.’

Stephen Jen, head of SLJ Macro Partners, told the Telegraph that Asian investors could not understand what was going on.

He said: ‘It is totally bizarre. They simply don't understand it, and nor do I. Until a week and half ago everybody thought there was a zero probability of Scotland voting Yes.

‘We have always assumed the United Kingdom would stay united, but now everything we thought about the UK has suddenly been tested, and will have to be repriced.’

He said the situation would be even worse if Scotland refused to take its share of the UK debt, as Alex Salmond has threatened.

Mr Jen said: 'Sterling could weaken a lot, though just how far it falls depends on a complicated dynamics. If Scotland tries to keep all the oil and refuses to take on its share of the public debt, there could be a run on UK assets.' 

The growing uncertainty over the result of the next week's independence referendum may, meanwhile, have knocked the confidence of Scotland’s biggest employers in Scotland, according to a survey.

Manpower's employment outlook study suggested company bosses were holding off hiring new workers amid fears over independence.

James Hick, managing director of ManpowerGroup Solutions, said: ‘The UK jobs market has experienced an unprecedented boom so far in 2014, with job creation peaking at its highest level since records began in 1971.'

Mr Hick added: ‘This raises questions about whether the phenomenal level of job creation we've seen can be sustained.

‘The fourth quarter's Outlook suggests it can't, with a two-point fall in hiring intentions - the sharpest dip we've seen in three years.

‘While the UK economy is in robust health, there are issues that may be making employers more cautious.

‘The eurozone's recovery is stalling, and the UK faces a period of political uncertainty with the Scottish independence referendum, a General Election and a potential vote on EU membership all on the horizon’.



Source: This is Money

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