News Column

'Separate currency most likely solution'

May 28, 2014

Kate Devlin UK; Kate Devlin UK Political Correspondent

A BRAND new currency is the most likely option to be adopted by an independent Scotland, according to a new report by Barclays.

The bank also warned that a Norwegian-style oil fund, one of the SNP's flagship policies, would be difficult to replicate. Barclays said that it took no stand on whether or not Scots should vote for independence.

The bank's report looked at four potential options, including a formal currency union with the UK, an informal union or 'Sterlingisation', the euro and a new currency.

Formal and informal monetary union options were "more challenging than generally assumed", it found.

Scotland's finances would also make joining the euro "even more difficult", according to the report.

As a result, a separate currency for the newly independent state "may be the most likely" outcome.

The report also warns that Norway's multi-billion pound fund was created at a time when further oil production estimates were on the rise.

"The creation of a similar framework in Scotland would instead occur at a time when projected oil production is on a steep decline", it adds.

Scottish ministers maintain that a currency union is in the best interests of both Scotland and the remaining UK. But the Chancellor George Osborne has ruled out this option.

A Scottish Government spokeswoman said: "The pound is as much Scotland's as it is the rest of the UK's and a currency union, as this paper shows, is in the interests of the rest of the UK."

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Source: Herald, The (Scotland)

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