Economic expert says currency union in no country's interests


An economic expert told MSPs a currency union between an independent Scotland and the rest of the UK would be in the interests of neither, on 5 March 2014.

Dr Angus Armstrong from the National Institute of Economic and Social Research told the Economy, Energy and Tourism Committee a formal currency union would be "very difficult indeed" and added UK Chancellor George Osborne had been "entirely rational" to rule it out.

The committee was taking evidence in the first session of the day as part of its inquiry into Scotland's potential economic future after the referendum.

Dr Armstrong said for Scotland to attain the aspirations detailed in the SNP's White Paper it would require Scotland to have its own currency, to allow it to control all the policy levers.

Professor Jo Armstrong from the University of Glasgow agreed, saying for Scotland to be truly independent it would require its own currency to a control all fiscal levers.

"If I'm truly independent and I want full access to levers of power, I would want to try and make my own currency work."

Paul Johnson from the Institute of Fiscal Studies (IFS) also gave evidence.

Recent analysis by the IFS showed the economic outlook for an independent Scotland looked better than previously forecast, but still relied on spending cuts.

It also said Scottish government oil forecasts seemed "too optimistic".

First Minister Alex Salmond has said blocking an independent Scotland's ability to share the pound could damage business in the rest of the UK.

Mr Salmond was speaking after Chancellor George Osborne and his counterparts in Labour and the Liberal Democrats all said a vote for independence meant walking away from the pound.

You can watch part two of the committee's evidence session here: Economy Committee 2

You can watch part three of the committee's evidence session here: Economy Committee 3

Copyright © 2018 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.