Full Report: Chancellor warns Scotland could lose the pound

An independent Scotland could lose the pound - that was the warning from the Chancellor George Osborne as he launched a new treasury report today.

The Scottish Government says it wants to create a currency union with the rest of the UK if Scots vote 'yes' in the referendum next year.

However, Mr Osbourne cast doubt on the idea that a deal could be struck and warned Scotland could be heading into 'unchartered waters.'

Kathryn Samson reports:

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Pound or Euro? Division over Scottish currency

There is debate in Scotland over whether or not the Sterling Pound or Euro would be used as the country's currency if the country votes for independence.