The UK now faces years of volatility

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.