Scotland Should Keep Pound

Scotland Should Keep Pound.

Scottish independence is back to the fore for the Government's latest discussion paper.  The paper will suggest that the UK is better equiped with handling a financial crisis.

The paper which will be published today claims that Scotland if it were independent would have a disprortionately large banking sector for the size of the economy.

The document has been dismissed by Scotland’s Finance Secretary for lacking credibility.  In reposte, the pro Scotland independence camp is said to be publishing a paper on Tuesday to dismiss these predictions and showing Scotland’s financial strength and the opportunities is would bring if it were independent.

Our View

Scotland will keep the pound.  Scotland will likely stay within the Union.  It makes no economic sense for Scotland to leave, yes there is oil, but the financial sector is heavily geared to the rest of the UK.  RBS, the state owned banked has an economy on its own, larger than the rest of Scotland put together.

We suggest a Scotland with its own currency would be a disaster for Scotland.  A smaller economy with limited resources to paid back debt would make it very difficult for any Scottish Government to borrow money.