Sterling markets are stirring on the risk of the U.K.’s 307-year-old union splintering, and that spells danger for the pound.
Britain’s currency is likely to weaken when markets resume trading after the weekend, strategists said following a poll that showed the Scottish independence campaign gained a lead for the first time this year with two weeks left before the vote. The pound fell the most in 14 months last week, and gauges of future price swings surged after the previous YouGov Plc showed the “No” campaign’s lead was shrinking.
“The referendum is on a knife edge,” saidNick Stamenkovic, an Edinburgh-based fixed-income strategist at broker RIA Capital Markets Ltd. “Markets have been too complacent but are now waking up to the increased risk of Scotland voting for independence.”
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