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<p>The only way to keep the pound as it is now is for Scotland to stay in the UK. No one should assume that an independent Scotland should continue to use the pound.</p><p>It is highly unlikely that a currency union would be in the best interests of either an independent Scotland or the continuing UK.</p><p>As the euro area has shown, currency unions require members pulling together in strong political and fiscal union, not pulling apart. Those who propose independence want to break the UK's successful political and fiscal union.</p><p>An independent Scotland and the UK would have different and diverging economies and a one-size fits all monetary policy may not be desirable for either country. An oil price shock would have very different effects in Scotland compared with the rest of the UK.</p><p>If there was any sign that a currency union lacked credibility, the financial markets would lose confidence in both members and borrowing costs would increase amid speculation of a break.</p> |