Scotland 'should retain the pound'

Feb 10 2013

Scotland should retain sterling as currency in the event of independence, according to the First Minister's economic advisers.

Holding on to the pound "immediately" after a vote to leave the union would also benefit the rest of the UK as a key trading partner, they conclude in a report due to be published in full on Monday.

"In our view it would be in Scotland's interests to retain Sterling immediately post-independence," the report states.

"It is also the case that, post independence, this would benefit the rest of the UK to maintain a key trading partner as nearly 10% of the existing UK economy Scotland would remain one of the largest trading partners of the UK economy.

"There would be particular advantages for the UK in areas such as energy and financial services. Scotland's economy is strong enough and sufficiently aligned with the rest of the UK that a separate currency would not be necessary."

The future currency of Scotland, assuming a Yes vote in autumn 2014, has been questioned by supporters and opponents.

Some argue Scotland would have to adopt the euro as a consequence of gaining full EU statehood, while others have called for a new currency or retention of sterling.

The full report, which looks at monetary, financial and fiscal policy for an independent Scotland, is due to be published on the same day as the UK Government reveals its first analysis paper in an attempt to protect the union.

The Scottish proposals follow work by First Minister Alex Salmond's council of economic advisers, which brings together academics, including Nobel prize-winners.

Crawford Beveridge, chairman of the council's fiscal commission working group, said the publication does not determine what path Scotland should take.