Until about a week ago, the financial markets "gave virtually zero weight to the possibility" of Scotland voting for independence, investment bank UBS pointed out yesterday.

Investors have largely kept their cool and their confidence in Scotland since the referendum was announced, with foreign investment even hitting a 16-year high last year. However, the shock of last weekend's YouGov poll has rattled many in the markets.

Traders, still uncertain about how to price in the prospect of a Yes vote next week, sent the pound lurching lower against other currencies yesterday and stocks with ties to Scotland have been unloaded in a hurry.

"The odds of a Scottish Yes vote are still extremely low if we step away from the headlines," said John Hardy, head of foreign exchange strategy at Saxo Bank. "Still, it's complacent to say that the uncertainty surrounding the vote is fully priced in at these levels; if other polls raise the uncertainty further, there is no telling where the action could take us in the near term."

The pound has been sliding against the dollar since July, but yesterday's slump was the biggest one-day decline in over a year. Sterling also lost more than one per cent against the euro.

Stocks and shares also came in for a hammering yesterday, and the FTSE 100 was kept in negative territory all day as equity traders digested the latest from Scotland.

SSE, which makes more than a third of its earnings north of the Border, tanked 2.3 per cent, while Faslane naval base manager Babcock fell 2.4 per cent and Weir Group dropped 1.5 per cent.

Scottish financial firms were also hit hard. Shares in Lloyds, RBS and Aberdeen Asset Management all fell, and even Standard Life, which had been riding high after announcing the sale of its Canadian arm last week, lost value yesterday.

UBS said customers are likely to shift their money out of Scottish banks "within days" of a Yes vote, and any lingering uncertainty surrounding a narrow No vote would discourage people from keeping deposits north of the Border. While analysts have expressed these fears before, plenty more people in the City were paying attention yesterday.

Deutsche Bank was even more ominous in its forecasts. In a research note entitled "Scotland: be afraid, be very afraid", its analysts said a break-up of the union "could easily derail the UK economic recovery".

"On the currency side, it could at worse lead to a destabilizing crisis in the whole British banking system and at best leave the rest of the UK with an unstable currency union in which the Bank of England is forced to continue to provide liquidity to Scottish banks while Westminster thrashes out a fiscal and monetary arrangement with a new Scottish sovereign government holding all the cards," they said.