Independent Scotland would be too small to rock the pound

RESEARCH released today suggests that if an independent Scotland kept the pound, its size would give it minimal or no influence over monetary policy.

A report published by the National Institute of Economic and Social Research (Niesr) suggests that given the size imbalance between Scotland and the rest of the country, any such arrangement would resemble “dollarisation” – the practice of nations in the Americas and Caribbean using the dollar but having no influence over US monetary policy.

The authors suggest that there is no reason for the UK to impose borrowing constraints on an independent Scotland, since its fiscal decisions would have no impact on monetary policy set by the Bank of England.