Independent Scotland might have to ditch the pound, SNP's Alex Salmond admits

Jasper Jolly
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On The Campaign Trail With Former First Minister Of Scotland
Blue sky thinking: Alex Salmond has said Scotland could ditch the pound (Source: Getty)

Former Scottish first minister Alex Salmond has said Scotland could ditch the pound if it wins independence in a new referendum.

The Scottish National Party (SNP) previously said it would continue to use sterling, but Salmond told the Financial Times he could change his view to reduce reliance on the rest of the UK for monetary policy.

“You can’t do something which the other side could have a veto over,” he said in the FT interview.

Read more: Theresa May: "Now is not the time" for a new Scottish independence vote

However, Salmond reportedly ruled out joining the euro, saying an independent Scotland could launch its own currency.

The question of what currency Scotland would use became a key issue in the “No” campaign, which focused heavily on the economic damage it said independence would inflict on the country.

Salmond led the campaign for independence in 2014, but resigned as leader of the SNP after the unionist side won 55 per cent of the referendum.

The currency question will likely feature heavily again in the run-up to a second referendum. Salmond reportedly said the new Scottish currency could be pegged to the pound or freely floating.

Read more: Forget independence: The SNP should fix Scotland's failing public services

Issuing its own currency would allow a new Scottish central bank to respond in a liquidity crisis, but launching a new currency would be a huge undertaking for an independent government, with wide-ranging implications particularly for financial services businesses as well as exporters.

The Scottish government would also have to negotiate its own trade relationship with the EU. While 62 per cent voted remain in the EU referendum last June, it would be highly unlikely to complete a divorce with the UK before it leaves the EU around April 2019.

First minister Nicola Sturgeon announced on Monday the SNP will seek a second independence referendum. Sturgeon said her preferred timing for a vote would be between autumn 2019 and spring 2019, shortly before the UK officially leaves the EU.

However, Prime Minister Theresa May made it clear she would not countenance a vote during the Brexit process, saying “now is not the time”.

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