Scotland is expected to vote Yes in a second independence referendum and introduce its own currency before the UK leaves the European Union in 2019, according to American bank JP Morgan.

Scotland is expected to vote Yes in a second independence referendum and introduce its own currency before the UK leaves the European Union in 2019, according to American bank JP Morgan.

Bank economist Malcolm Barr said in a note to clients that a 'pressure to hold a new referendum' would be expected following the UK's decision to leave the EU, and that Scotland would establish its own currency instead of continuing to use the pound.

Article 50

The Wall Street bank is of the opinion that whoever takes over from Prime Minster David Cameron in October is predicted to trigger Article 50 later this year, setting into motion the two-year period of negotiations that the UK is required to undertake to exit the bloc.

Mr Barr stated that the UK has two available options: a 'Norway-style' agreement, which would allow free movement and budget contributions to the EU in exchange for access to the single market, or an arrangement that would reduce access to the single market, as reported by the Scotsman.

He said:

At this point in time, the latter appears more likely. We expect there to be clear evidence of multinational operations shifting the location of their activity out of the UK given the regulatory uncertainties.

"Even if the UK begins to signal that it will compromise on other priorities in order to secure full access to the single market in financial services, there is a clear risk that euro-denominated activities relocate to within the EU simply to ensure continuity of relationships.