US investment bank JP Morgan has said it now expects Scotland to vote for independence and introduce its own currency before Britain leaves the European Union in 2019.

"Our base case is that Scotland will vote for independence and institute a new currency at that point," the bank’s economist Malcolm Barr said in a note to clients today after the finance house produced a paper analysing the consequences of the UK’s vote to leave the EU.

The paper warns there are “myriad uncertainties in how the UK’s relationship with the EU will evolve” but says the bank’s analysis provides a “case for how we think things will play out from here.”

In a section on Scotland it says: "Intersecting the UK’s EU exit process is likely to be pressure to hold a new referendum on Scottish independence, which we expect will ultimately produce a vote shortly before the UK leaves the EU in 2019.

“Our base case is that Scotland will vote for independence and institute a new currency at that point.”

Nicola Sturgeon has already instructed the Scottish Government to prepare legislation for a second independence poll with the First Minister warning the vote for Brexit makes the vote “highly likely”.