An Independent Scotland Would Lose The Pound, Warns Alistair Carmichael

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Scotland risks losing the pound if it wins independence at next year's referendum, Scottish secretary Alistair Carmichael has warned.

Carmichael said Scotland would be expelled from the sterling currency union and that George Osborne's scepticism about the prospect of it being allowed back in meant "it is not going to happen".

He told the Financial Times: “George Osborne has said in terms it is highly unlikely. Most people in Whitehall understand that if George Osborne says something is highly unlikely, it is not going to happen."

The Chancellor has previously said Scotland would be "highly unlikely" to keep using sterling, avoiding any outright dismissal of idea by saying he would not "prenegotiate" Scotland's exit.

Former Labour chancellor Alistair Darling has poured scorn on the financial prospects of an independent Scotland, blogging on the Huffington Post UK: "As part of the UK, we are better placed to tackle the long term challenge of sustainable public finances."

SNP first minister Alex Salmond has already set out plans to create to keep the pound by creating a "sterling zone" with the rest of the UK. He said it was "in the interest of Scotland and the rest of the United Kingdom”.

Experts from the Fiscal Commission Working Group, set up by Salmond, have praised the idea of an independent Scotland keeping the pound as "sensible".

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