http://dealbook.nytimes.com/2014/09/18/pound-rises-on-early-results-of-scottish-vote/?_php=true&_type=blogs&ref=business&_r=0
Scotland recently held a public vote, leaving it up to the citizens of whether they would become completely independent or remain as part of the United Kingdom. The ultimate decision of the people was to remain part of the UK and reject their shot at independence. This decision initially had a favorable effect on the market and pound, but the celebration soon faded as other issues were not able to take precedent in the UK.
During the campaign, one poll showed that the pro-independence party was ahead, which had a large decreasing effect on the exchange rate of the pound compared to the US dollar. This just goes to show that outside factors, such as the breakup of the UK, can have adverse affects on economic indicators, such as currency exchange rates and the stock markets. People feared that if Scotland voted for their independence, they may not use the pound anymore and a political breakup was anticipated.
An explosion of the British empire, would have destabilized the North Atlantic alliance and perturbate the relations with U.S and Europe.
ReplyDeleteWith Scotland a part of the UK still, the certainty of both are now much more stable. Scotland will still get more independence with the changes that will be made after the independence votes no conclusion, but they will keep their financial stability as well.
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