Sterling slides on fresh fears of another vote to split the UK
THE value of sterling fell yesterday over fresh fears that Nicola Sturgeon could call a second Scottish independence referendum.
It comes just days after the Royal Bank of Scotland revealed fears that a rerun of the 2014 referendum could ‘adversely’ affect its operations.
But tonight the First Minister is expected to ignite a new row with the UK Government over fishing and farming rights.
She will claim that Scotland should be given full control over the two areas and any other deal following Brexit is ‘simply not on’.
Miss Sturgeon has repeatedly threatened that another vote on breaking up the Union is ‘highly likely’ following the UK-wide decision to leave the EU.
With campaigners claiming it could be ‘just weeks’ until she calls another divisive referendum, experts said yesterday the continued threats of another vote had led to a slump in sterling.
The pound’s 0.6 per cent drop against the euro to 1.17 euros and 0.5 per cent against the dollar to $1.24 came during early Asian trading yesterday. It followed claims that Theresa May is preparing for another Scottish referendum.
Senior analyst Ipek Ozkardeskaya, of LCG Insight, claimed there would be a ‘fundamental downshift’ in the value of the pound if another referendum were called.
She said: ‘The Scottish concerns are, in fact, nothing new. The UK’s decision to quit the European Union had immediately triggered questions regarding Scotland’s future in the United Kingdom. However, the eventuality hasn’t been largely factored in the pound’s value so far.
‘If Scotland decides to proceed with the second referendum to quit the UK, there would certainly be another fundamental downshift in the pound’s value, both against the US dollar and the euro.’
Scottish Tory finance spokesman Murdo Fraser said: ‘The SNP knows fine well ramping up its separation rhetoric damages the economy and creates uncertainty.
‘But, selfishly, it refuses to stop. It didn’t mind wreaking havoc in 2014 with independence threats, and it’s doing the same again.’
Miss Sturgeon is set to make a speech at the David Hume Institute in Edinburgh tonight where she is expected to claim that the UK Government is using Brexit as a ‘power grab to strip Holyrood of existing responsibilities’.
Writing in a national newspaper yesterday, she said: ‘The Tories have made it clear that – contrary to the promises of the EU Leave campaign and to the founding principles of devolution – they see powers repatriated from Brussels, even over devolved responsibilities like farming and fishing, going to Westminster rather than Holyrood. That’s simply not on.’
A UK Government spokesman said: ‘The Scottish Government’s proposal is for the powers currently held in Brussels to remain there.
‘In contrast, the UK Government has made clear we will use the opportunity of bringing decision-making back to the UK to ensure that more decisions are devolved. In doing so, we must ensure no new barriers to living and doing business within our own Union are created.’
He pledged it would ‘work with the devolved administrations on an approach to returning powers from the EU that works for the whole of the UK and reflects the interests of Scotland, Wales and Northern Ireland’.
‘Fundamental downshift’ ‘Ramping up the rhetoric’