Having been jumping up and down with incredulity for the last week at the incompetence of the ‘NO!’ campaign in failing to get its economic message across – which was fundamental to its case; I have finally calmed down – So be it!! I am now at peace with the world. If Alex Salmond wants to lead his country over the precipice into the abyss, be my guest. Though I am a passionate unionist, the smaller Union will recover, which is more than I can say for Scotland. I have just one final comment to make about our currency – STERLING. Assuming the government, opposition, the BOE and the EU mean what they say – no Sterling for an independent Scotland, I wonder how many hundreds of thousands of Scottish people with mortgages with RBS and Lloyds Banking Group realise that they are vulnerable, if Sterling is withdrawn. Whatever currency Scotland is forced to adopt will surely be devalued leaving mortgagees in a parlous and invidious position. My case rests

However my distinguished colleague, SIMON FRENCH, who knows about these things, makes the following observations.

“It is our view that the Scottish government would be morally obliged to take a currency agreement as part of any independence treaty to the Scottish people ahead of its ratification, such is its centrality to the independence debate – a second “independence vote” in 2016 therefore cannot be ruled out.

Opinion polls on Scottish Independence continue to be too close to call with bookmakers now offering odds as short as 7 4 for a Yes vote. This is in spite of stark uncertainty over the currency options available to, and appropriate for, an independent Scotland – this represents the single most important economic issue facing investors and policymakers.

It is this uncertainty that is driving the current slide in Sterling – down 2.3% on a trade-weighted basis since 1 September. A ‘Yes’ vote next Thursday will trigger months of fractious negotiations and we would expect these to provide the stimulus to drive Sterling lower still, with funds leaving Scotland and confidence in the region trashed.”

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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