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Sterling Steady as Outright Majority for Scottish Nationalists seen Unlikely

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LONDON, May 5 Reuters Sterling was unchanged against the dollar on Wednesday morning as a poll showed Scotlands main proindependence party was unlikely to win an outright majority in Thursdays election, a blow to its hopes for a referendum on separating from Britain.

The Scottish National Party SNP wants a majority in the devolved parliament to demand another referendum, although British Prime Minister Boris Johnson has repeatedly said he will not grant one.

For this reason, the impact of the elections results on the British currency are expected to be fairly limited.

It is far from clear how we get to a second referendum, even under a landslide SNP victory and in the event of a referendum, the majority in favour of independence has largely disappeared with opinion now split 5050, wrote Adam Cole, chief currency strategist at RBC Capital Markets, in a morning note.

Analysts at ING shared the same view.

We expect the impact of the Scottish elections on GBP to be very limited, they argued adding that regardless of the result, most dont expect an imminent vote on independence.

While an independent Scotland appears to be a risk fairly far away on the horizon for investors, Britains monetary policy and its exit strategy from the massive stimulus launched to weather the impact of the coronavirus pandemic represents a more immediate concern.

Policymakers of the Bank of England meet on Thursday when the central bank will publish its May Monetary Policy Report….

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