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By John Walsh

The No decision has dashed many Scots hopes of breaking free and building their own nation


As the vote for Scottish independence yesterday approached, polls indicated a dramatic shift in public sentiment. Up until a few months beforehand, Scotland’s head seemed to be ruling its heart. Polls consistently predicted an approximate 60/40 split against independence.

In the weeks leading up to the vote this margin narrowed substantially with some of the many polls taken indicating a majority in favour of independence. Politicians departed London in their droves to convince the Scottish public not to leave the UK, (and thereby taking a good chunk of North Sea oil with it).

People beyond the British Isles took more interest in the here-to-fore parochial spat. In Madrid, Brussels and beyond, mandarins troubled themselves with what a vote for Scottish independence would mean for other independent-minded regions of the EU.

'All this worry was unnecessary'

As we now know, all this worry was unnecessary. The Scots weighed up their options and chose the devil they know rather than the devil they don’t. Should those who wanted the UK to remain intact breathe a sigh of relief that a near thing has been avoided?  I would say no — for this was never a close run race and any relief would be misplaced and unnecessary.

As the polls were oscillating with the ferocity of a bagpiper’s elbow, elsewhere we had data that would give succour to the most nervous of Unionists. The many spread-betting markets facilitating people to place bets on the outcome of the vote were a beacon of calm and consistency to the relative storm of public opinion.

John Walshexternal link is Professor of Marketing at IMD business school and directs Building on Talentexternal link (BOT), a program for high-potential managers early in their career looking to take on greater responsibility.

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The markets were consistent from one to another, whereas public opinion polls yielded starkly different outcomes and, remarkably, the markets were consistent over time.

Even as polls narrowed, the price of independence stayed extremely consistent in the world of spread-betting. Polls give us the emotional pulse of the voter but the financial markets give us their expectations, and indeed the expectations of non-voters too.

On the morning of September 18, you could place a bet on Scottish independence at pretty much the same price, or odds, as a year previously.

More reliable

Financial markets of this kind, where people can trade on their expectations of political outcomes with their own money, have been shown to be more reliable predictors than polls. The Scottish vote is just the latest example.

Whether it is the outcome of the US presidential election or the Eurovision Song Contest that is stressing you out, seek comfort, or at least the most accurate information available to you, in the spread-betting markets.

So, it’s onwards with the European Union project. And one cloud on the horizon is the current UK Prime Minister’s promise to hold a referendum on the UK’s membership of the EU, if he is Prime Minister after the next general election.

Currently, spread-betting markets think UK voters would reject such a referendum, if they get the chance. But the price put on UK independence of the EU reveals speculators think it is much more likely than they did Scottish independence of the UK.

The Europhiles among you should not fret too much, yet. Our spread-betters believe, although again marginally, Mr Cameron will be doing something else than being Prime Minister after the next general election.

This article was originally publishedexternal link on IMD's webpage on September 19, 2014. 

Opinion series publishes op-ed articles by contributors writing on a wide range of topics – Swiss issues or those that impact Switzerland. Over time, the selection of articles will present a diversity of opinions designed to enrich the debate on the issues discussed.

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professor at IMD business school