Sterling sinks as independence win in Scotland looks more likely

Leader of the Yes campaign Alex Salmond is feeling more confident about a win
The pound slumped yesterday in the wake of a fresh poll which suggested that Scotland’s looming independence referendum could go right down to the wire.

The Yes campaign was buoyed by the release of a YouGov poll which showed 47 per cent of voters were ready to back independence, against 53 per cent who planned to vote to remain part of the UK.

The figure has narrowed sharply since the first week of August, when 61 per cent of those polled by the same organisation said they would vote against independence, and a solid win for the No campaign seemed extremely likely.

The pound fell by 0.75 per cent during the day, dropping to $1.647. The pound’s implied volatility also climbed rapidly, indicating that nervous investors were attempting to hedge against their exposure to the currency.

Chief secretary to the Treasury Danny Alexander also made a fresh intervention into the heated debate yesterday evening, revealing advice from European commissioner Olli Rehn. The EU economic and monetary affairs chief argued that if Scotland used the pound without setting up its own central bank, it would be unable to join the EU.

Speaking last night, Alexander said that unilaterally using the pound was a “bonkers idea which flies in the face of any reasonable notion of what independence means and which would impose costs and risks on people and businesses in Scotland”.

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