* "Yes" vote could have severe consequences -Goldman
* Risk of euro-style crisis -Goldman
* Sterling falls to new lows versus dollar (Adds further reaction and detail)
By Sudip Kar-Gupta
LONDON, Sept 3 (Reuters) - A Scottish vote for independence from the United Kingdom this month could have serious consequences for the Scottish and UK economies, Goldman Sachs said in a research note on Wednesday.
Goldman Sachs economist Kevin Daly said that while the Wall Street bank still felt the most likely outcome was for Scotland to vote to stay in the United Kingdom, a surprise victory for the "Yes" campaign to break away would have a drastic impact.
"Opinion polls suggest that the gap between the 'Yes' and the 'No' camps has narrowed but that a 'Yes' vote in favour of independence remains unlikely," Daly wrote in the note.
"In the event of a surprise 'Yes' vote, the near-term consequences for the Scottish economy, and for the UK more broadly, could be severely negative," he added.
STERLING HITS NEW LOWS
The vote takes place on Sept. 18, and Daly said the threat of a break-up would give investors a strong incentive to sell Scottish-based assets and withdraw deposits from Scottish-based banks.
Part-nationalised British bank Lloyds, which owns Bank of Scotland, is considering having its registered office in London rather than Edinburgh should Scots vote for independence, banking industry sources have told Reuters.
Daly added that the Bank of England would be unable to credibly commit to a sterling currency union remaining unbroken in case of a "Yes" vote later this month.
The pound hit a new seven-month trough against the dollar on Wednesday despite some upbeat British data, as investors fretted that Scotland may yet vote to break up the UK.
Daly said uncertainty over whether or not an independent Scotland could keep sterling as its currency could lead to a crisis. He drew a comparison with the euro currency bloc, where weaker and more indebted economies have come under intense financial market pressure.
"The UK government's position is that an independent Scotland would not be able to retain sterling as its currency. Pro-independence campaigners argue that, in the event of a 'Yes' vote, the UK government would quickly change its stance because retaining a monetary union would be 'overwhelmingly' in its interests," said Daly.
"However, in our view, the threat to disband the sterling monetary union with Scotland is credible," he added.
"One of the main lessons from the euro area crisis is that a reasonably high degree of fiscal and/or financial integration is necessary, as a means of effective risk sharing, for a monetary union to work. Without political and fiscal integration, it is difficult to see the rest of the UK agreeing to provide a monetary and financial backstop to Scotland."
I agree we are in the same ball park ... if the range bound situation continues as per the last 2 years...If profits increase to a bigger amount. The range could well be expected to increase slowly upward ...
That said until rate rises happen, profits will be hard to grow as they did before the crisis... so many economy factors affecting so many in different ways...
Too many in the UK population and so few houses .... and a reported increase of 5 million by 2525 to add to the current 65 million... where they will live and get jobs... God Knows .. if that amount of growth happens ... an now reported today ...possible power issues this winter...or the future...
Will stop there .. it is a big subject with many viewpoints...
Have to agree with LennyMac , resistance at 365 and then 375 ish . I posted a couple of days ago that if resistance held I thought the Gaps would be closed sooner rather than later . I'm still of the same mind . There's one remaining Gap at 329 opened on the 24th July , thought it was going to be closed 8th / 9th August but the SP rebounded just before it closed . Will it happen this time ? Not a great deal of good news about and a fair bit of uncertainty about the Scottish vote aint helping . .....Logging on , pain in the nether region .
It appears that the upper limit of the trading range remains constant at between 365 and 375. Admittedly, the markets have subdued by geopolitical uncertainty so there might be more potential upside but the trend of a range of 320- 370 appears still to be right.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.