SNP ‘considering Scottish pound plan’ for second independence bid

First Minister Nicola Sturgeon. Picture: PA
First Minister Nicola Sturgeon. Picture: PA
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NICOLA Sturgeon may propose that an independent Scotland should have its own currency as the SNP seeks to strengthen the economic argument for leaving the UK.

Seen as one of the major failings of the SNP’s position on how Scotland would fare without Westminster, the idea of a currency union with the rest of the UK was seen as problematic by, among others, Scottish economists and Bank of England governor Mark Carney.

The Sunday Herald report that senior SNP MPs are reviewing the party’s position on monetary policy and will issue a report to the First Minister afterwards.

A new SNP proposal would likely see the Scottish pound pegged to sterling and supported by a newly established Scottish central bank.

The notion of a currency union was rejected by then-chancellor George Osborne and his Liberal Democrat colleagues as unworkable.

Senior SNP MPs have been reviewing a range of economic approaches for Scottish independence – and one party source told the Sunday Herald that the SNP’s previous stance on a currency union was “untenable”.

READ MORE: Scots area sets own currency with ‘Govanhill Pound’

This follows JP Morgan’s assertion in late June that it expects Scotland to break away from the UK and introduce its own currency before Westminster’s exit from the European Union. 
Malcolm Barr, an economist at the bank, said: “We could imagine a framework where both the ECB and the Bank of England made some small portion of their reserves available to assist in the management of the new currency upon its launch.”

“There could be an initial commitment to try and stabilise the new currency near parity to the pound, with interest rates set by a Scottish central bank above those set by the Bank of England.”

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