Osborne to ‘rule out’ sterling union with independent Scotland

Britain's chancellor of the exchequer George Osborne is set to rule out a formal currency union with Scotland if it votes to become independent, the BBC reported today.

Mr Osborne has previously said the rest of the United Kingdom - England, Wales and Northern Ireland - might be unwilling to let an independent Scotland keep the pound. The BBC said he would go further in a speech this week by ruling out a currency union.

Scots will decide on September 18th whether their country, which has a population of just over 5 million and is a source of North Sea oil, should end its 307-year-old union with England and leave the UK.

No one was immediately available to comment on the BBC report at the Treasury.

Bank of England governor Mark Carney went to Scotland at the end of January to warn that an independent Scotland that keeps the pound would have to give up some national sovereignty or risk the kind of problems exposed by the euro zone crisis.

The Scottish National Party, which runs Scotland’s devolved government, has made clear that it sees the creation of a currency union with the rest of the United Kingdom as central to its vision of an independent Scotland. Alternative options such as joining the euro zone or creating a new currency are seen as more expensive and potentially riskier.

The SNP has said it might not accept its share of UK debt if it is not allowed to use the pound in a currency union.

Reuters