Scottish independence: Carney wary of currency plan

Mark Carney will meet the First Minister later this week. Picture: Reuters
Mark Carney will meet the First Minister later this week. Picture: Reuters
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THE governor of the Bank of England will warn Alex Salmond this week about the dangers of an independent Scotland using Sterling.

Mark Carney is expected to compare the SNP’s proposed currency union between an independent Scotland and the UK to the crisis-ridden eurozone.

Mr Salmond, who will have his first meeting with Mr Carney later this week, has insisted an independent Scotland could retain the pound, with the Bank of England making key decisions over interest rates.

However, it has emerged that Mr Carney has major concerns about formal currency sharing unions between nations.

He is understood to have confirmed that he will raise these concerns when he meets Mr Salmond and delivers a major speech in Edinburgh on Wednesday.

In an interview recorded last week, Mr Carney warned of “issues” of currency unions which have already been seen in Europe in what was a clear reference to crisis-hit Greece and the eurozone.

Mr Carney, when asked if an independent Scotland could retain the pound, said: “Well there are issues with respect to the currency unions. We’ve seen them in Europe.

“It’s one of the factors that affects the outlook for the UK economy, has affected us over the last five years, affects us going forward – the challenges of having a currency union without certain institutional structures.

“I’m going to speak to this issue in Scotland next week and I’m certainly going to meet with the First Minister prior to doing so.”

However, a Scottish Government spokesman insisted that Mr Salmond had put forward “very sensible” proposals for a currency union in the event of a Yes vote.