Scotland’s possible independence from the UK is more likely to harm the country’s finance sector than the UK’s withdrawal from the European Union (EU), according to a new research.
According to the study released by the Strathclyde University on Monday, Scotland’s banks and financial institutions are expected to survive the Brexit shock with no major implications.
However, the outlook of an independence from the UK looks grimier than even a “sharp” Brexit, the research warns.
Under the “hard Brexit” formula, the UK may lose its preferential access to the EU’s single market and suffer from soured relations with other EU members.
“The uncertainties for the sector following independence look even greater than those following a sharp Brexit,” read the report, which was conducted by former Royal Bank of Scotland economist Jeremy Peat and Owen Kelly, head of Scottish Financial Enterprise.
“There are risks associated with Brexit but, historically, they are not the largest that the industry has faced,” the report continued.
“While it is not easy to see new opportunities arising from Brexit, equally the threats are not, given the diversity of the sector existential.”
Around 90,000 people are directly employed by the Scotland’s financial services, while another 90,000 jobs are indirectly dependent on the industry. Overall, the sector contributes £8 billion to the economy.
Scottish and British officials have been at odds over Brexit, ever since an EU referendum in June.
Although nearly 52 percent of Britons opted to leave the bloc during the vote, some 62 percent of the Scottish people voted against the decision.
British Prime Minister Theresa May has made it clear that she will complete the Brexit process by 2019 and that Scotland has no veto over it. She has also turned down Glasgow’s calls for an ‘equal’ role in the Brexit negotiations.
The spat has revitalized Scottish hopes for secession, two years after the first independence referendum on September 18, 2014, where 55 percent of the voters opposed the idea.
According to Scottish First Minister Nicola Sturgeon says Scotland and the other two devolved administrations—Wales and Northern Ireland—were in favor of the UK remaining in the single market.