One of the top three credit rating agencies has warned that the continued use of the pound under an independent Scotland could create an uncertain future.
According to Fitch, sharing a currency but not banking unity could create a turbulent market place.
Drawing up a report into the UK profile should Scotland become independent, the agency concluded:
“As the intensification of the eurozone crisis showed in 2012, a monetary union without fiscal and banking union is unstable and the prospect of an exit from a monetary union could lead to high volatility and market turbulence, potentially detrimental to all members.”
The statement is important. Fitch, along with the other agencies Moody’s and Standard & Poor, is responsible for setting global credit ratings.
The report went on to say that without the fiscal and banking union, or debt linking between Westminster and Holyrood, the debt position of both countries would be significantly affected.
It would also potentially lead to higher borrowing rates, though it is unlikely that factoring fees would be affected.
Creating a debt link would also undermine independence, and the arguments for it.
However, Scottish government finance chiefs have disputed the findings, with a Holyrood spokesperson saying:
“Comparisons with the eurozone are wrong because the Scottish and rest of the UK economies are well-matched with almost identical levels of productivity, unlike the disparate economies of the euro area.”
The shared currency proposal has also received backing from the Fiscal Commission, Citigroup and Deutsche Bank. Many currency experts have also supported the policy.