The UK now faces years of vo­latil­ity

Financial Mirror (Cyprus) - - FRONT PAGE -

majority in the UK-mi­nus-Scot­land would swing to­wards out­right Euro-skep­ti­cism and cam­paign for an im­me­di­ate post-elec­tion ref­er­en­dum, lay­ing down con­di­tions for rene­go­ti­at­ing EU mem­ber­ship which Brussels, France and even Ger­many would be sure to re­ject.

Thus a Con­ser­va­tive vic­tory in a 2016 elec­tion would make Brexit almost cer­tain a year later. If, as is quite pos­si­ble, the Euro-skep­tics over­played their hand and the To­ries lost the 2016 elec­tion, the UK would be sad­dled with a high tax Labour-Lib­eral gov­ern­ment un­til 2021.

As a re­sult, if Scot­land does vote for in­de­pen­dence next week, it is hard to come up with a pos­i­tive sce­nario for Bri­tish as­sets, what­ever hap­pens sub­se­quently. Of course, there is al­ways the hope that the polls may be wrong or the Scots will change their minds at the last mo­ment once they re­alise what a Pan­dora’s box of po­lit­i­cal uncer­tain­ties they are about to open. But hope is not a strat­egy. We rec­om­mend sell­ing ster­ling and other Bri­tish as­sets, apart from those such as re­source shares which have lit­tle ex­po­sure to Bri­tish pol­i­tics and which ben­e­fit di­rectly from a weak pound.

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