If Scotland votes for independence on September 18, a possibility which now looks more likely, it would be an event of such magnitude that too few in industry and finance have fully grasped.
The British pound’s slide has only just begun and it will fall further if the Scottish nationalists triumph. It will then continue to slide when the full scale of the political and constitutional chaos in Westminster is laid bare, and as the long and nasty negotiations between London and Edinburgh continue. But, while the pound will be the big loser in the short term, and has already plummeted from $1.71 in early July to $1.61 today, the euro will be next in the line of fire as the independence mania spreads. Spain in particular would be under huge pressure as a result and could easily be the next European country to split.
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