In a hotly contested referendum which was the culmination of a two-year battle between politicians, the ‘no’ campaign won with 55 per cent of the vote to 45 per cent.

In reaction, the yield on 10-year gilts rose six basis points to 2.58 per cent, while the 10-year treasury yield climbed three basis points to 2.65 per cent as investors reversed their flight to quality trade.

Meanwhile sterling – which had initially jumped to €1.28 against the euro and 0.6 per cent against the US dollar to go through $1.65 – settled up at €1.2761 and $1.6471 respectively.

Jeremy Cook, chief economist at currency exchange company World First, said: “It looks like it is all over for the ‘Yes’ campaign, and currency traders are back to backing the pound and pricing out the risk of a catastrophic split.

“We feel that there may be another twist in this to come but for now the City will wake to positive news for UK assets.”

UK equities are also pointing to a firmer opening, with the FTSE 100 expected to open up over 1 per cent.

Sterling had been falling against the US dollar since official polls earlier this month revealed more people than expected were planning to vote ‘yes’ in the referendum.

On 9 September, the currency fell below the $1.61 mark against the dollar as investor sentiment was hit by the changing expectations.

Various prominent industry figures had predicted significant falls in the currency as a result of a ‘yes’ vote, with Soc Gen’s Dr Doom saying sterling would slide “into the abyss”.