The Scottish Independence Referendum deciding whether to maintain a 300-year status quo or change to independence will be held on September 18. It has been relatively overlooked until recently when the polls started to show a yes vote was a possibility. Business editor Dene Mackenzie looks at some implications.
While the outcome of the vote is too close to call, several sectors, including banks, other financial institutions, oil and gas producers and exporters will be affected no matter the result.
Craigs Investment Partners broker Chris Timms said a yes vote for independence would affect United Kingdom equities negatively and there had already been signs of bank share prices weakening in recent days.
Scotland had benefited from the credibility of the Bank of England's monetary policy and financial institutions had benefited from a strong regulatory regime.
Also, foreign investors went to Scotland because they relied on a predictable investment environment. All of that came from a united Great Britain.
A separation from the UK would create uncertainty around what happened with the currency, he said.
''If it was to retain the pound, Scotland would be a silent party when it came to interest rates and would simply have to accept what was set by the Bank of England, despite the remainder of the UK no longer considering Scottish issues when setting monetary policy.''
Alternatively, Scotland could choose to control monetary policy and introduce a new currency, Mr Timms said.
A new currency would be destabilising as Scottish residents would be tempted to move their assets into UK-domiciled institutions to avoid losses as it would ''almost certainly'' weaken against the pound. Those were not the only two options, he said.
Scotland could opt to join the euro - unlikely since it would require Scotland to join the European Union.
The pound had been weak, hitting a 10-month low recently.
As Scotland's banks would no longer have access to Bank of England support, they would have to shore up their balance sheets by reducing their lending.
The new Scottish government would have to tighten fiscal policy to establish credibility and to have the resources to underwrite the financial system, Mr Timms said.
Lloyds and the Royal Bank of Scotland had announced they would move their legal headquarters to England in the event of a yes vote.
The British Government still owned an 80% stake in the Bank of Scotland and a 25% stake in Lloyds.
If bank customers became concerned about the stability of the Scottish banking system, and the risk of devaluation of their currency, that could filter through to a high rate of deposit withdrawals.
According to the UK Treasury, Scottish banking assets are 12 times the size of Scotland's gross domestic product and the finance industry accounts for 200,000 jobs, about 8% of the workforce.
One of the companies facing uncertainty was drinks maker Diageo, which made about a quarter of its annual sales from scotch and owned the largest-selling global brand in Johnnie Walker, Mr Timms said.
A weaker Scottish currency would help the company. However, the heightened uncertainty over the stability of the currency and the lack of EU membership, and free trade, would both be negatives.
On top of currency issues, the possibility of export duties and the drag created from Scotland having to renegotiate trade agreements would impact on Diageo.
Oil and gas was another sector to see potential effects from the vote, he said.
BP remained the largest UK investor in the North Sea. The firm planned to invest 10 billion ($NZ19.9 billion) in the North Sea between 2011 and 2016 - its highest investment in the region.
However, BP had openly attacked Scottish independence, noting the uncertainty it would create, especially over currency and EU connections.
''There is a chance the political and economic uncertainty could delay some investment decisions by oil companies though an independent Scottish administration may try to encourage new investment given the importance of oil to the Scottish economy.''
The Scottish government said in the event of a yes vote, it would aim to complete negotiations quickly and for Scotland to become independent in March 2016, ahead of the Scottish Parliament elections scheduled for May 2016.
Mr Timms said the process might take longer, especially given the interruption of the UK general election in May next year and the possibility the UK government could change.
''We believe all this uncertainty will be bad for growth as many corporates are likely to take a `wait and see' approach with regard to any future investment until the political and regulatory landscape becomes clearer,'' he said.
Yes and no
A NO vote
There would still be plenty of negotiation, which would see Scotland getting more powers, including over taxation, spending and over a welfare state. A no vote would produce relief rally in the currency, and to a lesser extent, equity prices.
A YES vote
The currency was expected to plunge, lower share prices would follow with possibly higher gilt yields - the latter reflecting increased uncertainty of the UK being saddled with higher levels of sovereign debt. Markets might price in the Bank of England keeping interest rates on hold for longer with the yes vote generating risks to the sustainability of the recovery. To the extent a yes vote prompted a sizeable fall in the pound it could, through higher import prices and inflation, add to the need for the Bank of England to begin the process of policy normalisation.
