RPT-UPDATE 5-Relief, not euphoria, for UK markets as Scots vote to stay
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By Jamie McGeever
LONDON, Sept 19 (Reuters) - British financial markets rose and a collective sigh of relief echoed across the investment and business community on Friday after a Scottish vote against independence averted the deep uncertainty a United Kingdom break-up would have unleashed.
Bank shares drove the rally in equities, sterling hit a two-year high against the euro, and currency market volatility - which had reached historically high levels ahead of Thursday's vote - collapsed.
Royal Bank of Scotland said it had scrapped contingency plans to relocate to England. The cost of insuring against RBS defaulting on its debt dropped to its lowest since May 2008.
Scotland's rejection of independence ended a fraught few weeks for markets that had seen the value of sterling fall sharply after some polls suggested the 307-year old union was on the brink of splitting.
The vote not only keeps Britain intact but also reduces the likelihood of it leaving the European Union, potentially a much greater risk for markets and something Scottish independence might well have precipitated.
"The imminent threat of change to the union and the ramifications to both equities and currencies is dulled, but ultimately constitutional changes will come, and that in itself will bring a fresh set of challenges," said Alastair McCaig, analyst at IG in London. Continuación...