Scotland should create its own currency

If Scotland votes for independence, the rest of Britain has nothing to gain from sharing the pound with the new state, says Matthew Lynn. Here, he explains why.

The battle promises to be a good one at least for spectators. And it may well determine whether Britain remains a single country, or whether Scotland becomes independent.

Next month, the British government will make it clear what currency an independent Scotland should have if that is what the country votes for in the referendum scheduled for next year. It will argue that Scotland could keep the pound, but only if it accepts strict control of its budget. But the Scottish Nationalists are arguing they should keep the pound free of any conditions and have a share in the Bank of England. Both sides have got this wrong.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.