Chancellor rules out currency union with Scotland

If Scotland "walks away" from the UK it would also be walking away from the pound, the Chancellor has said. George Osborne issued the stark warning to voters north of the border ahead of September's independence referendum.

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Scotland 'would not need permission to use pound'

Scotland would not need permission to continue using the pound despite the Chancellor's view on the issue, and could continue with the currency in the same way countries like Panama and Ecuador use the US dollar, Sam Bowman from the Adam Smith Institute said today.

An independent Scotland would not need England’s permission to continue using the pound sterling, and in fact would be better off using the pound without such permission.

There is very little that an English government would actually be able to do to stop Scottish people from continuing to use the pound sterling if they wanted to.

Scotland’s position would be closer to that of countries like Panama, Ecuador and El Salvador, which use the US Dollar without American “permission”, and, according to research by the Federal Reserve of Atlanta, consequentially have far more prudent and stable financial systems than if they were part of a formal currency union.

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