Scottish independence: Pound slumps after Yes lead

Sterling had been at a six-year high above the 1.70 barrier as recently as the end of June. Picture: Ian Rutherford

A SURPRISE lead for the Yes campaign in polling ahead of the Scottish independence referendum has spooked markets as the pound slumped to a 10-month low.

The 1% decline to just below 1.62 versus the US dollar adds to sharp losses seen last week after an earlier poll revealed gathering momentum for the independence campaign. Sterling had been at a six-year high above the 1.70 barrier as recently as the end of June.

Michael Hewson, an analyst at CMC Markets, said: “For quite some time investors had dismissed the prospect of a Yes vote as an outlier, but recent opinion polls have shifted that perception and this has been no better demonstrated than by the plunge in sterling this morning.”

Uncertainty over the currency that an independent Scotland would use, and the shape and role of its monetary system have dogged markets.

Mr Hewson added: “One thing is certain, if we get this sort of volatility on the prospect of a Yes vote, can you imagine the reaction if we do get a Yes vote? It’s not likely to be pretty.”

Shares in Scotland-based financial institutions Royal Bank of Scotland, Lloyds Banking Group and Standard Life fell by more than 2% in the wake of the latest opinion poll. Perth-based energy supplier SSE was also lower.

Edinburgh-based Standard Life, which has been based in Scotland for 189 years, recently complained that it was still in the dark over ‘’material issues’’ surrounding independence.

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