Scottish independence: Pound continues to slide as Brown enters the fray

 
Billy Ehrenberg
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More pain for the pound.

After falling by almost 1.4 per cent yesterday, sterling looks to be continuing its slide against the dollar today, as the markets stare the possibility of an independent Scotland in the face.

With polls so close, the No campaign has brought a former political hitman out of his cosy retirement: Gordon Brown is set to enter the fray in earnest.

Brown, who rarely visits Westminster these days, has been called on to turn the tide back in favour of the No campaign, and his ability to influence the campaign may have ramifications for the pound too.

After yesterday's drama, the pound's weakening continued overnight, with the exchange rate reaching a low of $1.60706 just after 3am London time. At the time of writing it stood at $1.60942.

The graph below looks dramatic, and it is. The big drop came yesterday and is by far the biggest one-day fall in the last 12 months, and the costs of hedging against further drops has reached a three-year high, unmatched since November 2011.

The jitters come from polls suggesting Scots may well vote for independence on 18 September. A YouGov poll for The Sunday Times showed the Yes campaign ahead for the first time, while a TNS survey found a dead heat, with 39 per cent for No and 38 for Yes. Future polls are sure to make more waves.

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