Member Article

Foreign investors desert UK economy over Scottish independence vote

Billions of pounds are reportedly being pulled out of the British economy by foreign investors over fears that Scotland could vote “yes” to independence.

According to The Independent, figures from French investment bank Societe Generale show an exodus of investors from the UK.

These figures show that the exodus has increased from its “best position” this year, with £8.6 billion flowing out from the UK to approximately £12 billion leaving the UK.

Japan’s biggest bank, Nomura, has apparently warned of a potential collapse of the poung and is urging its clients to sever their financial exposure to the UK.

Nomura’s advice to clients which include major pension funds was not only to pull money out of British investments, but to take out bets against British Government bonds and UK banks’ share prices.

Jordan Rochester, Nomura’s foreign exchange strategist told The Telegraph that fast-moving hedge funds had started moving out some time ago, but now traditionally longer-term investors like pension funds were also taking flight.

He said: “The risks are suddenly seen as much greater for Japanese pension funds.”

Sterling has fallen sharply since the shock poll at the weekend suggesting a narrow “yes” vote was on the cards. It fell again today until the governor of the Bank of England gave a speech to unions which investors took as suggesting he was eyeing an interest rate rise.

The amount invested into the UK is still lower than they it was at their 2007 peak. Societe Generale analysts told clients that this could worsen with the prospect of Scotland seceding.

They also added that concerns about the UK leaving the EU were also triggering a flight from Britain.

This was posted in Bdaily's Members' News section by Clare Burnett .