UK pound is seeing slight gains today, perhaps in correction for recent difficulties, which are the result of concerns over what’s next for Scotland. Even though the sterling is higher, the gains are precarious, as the Scottish independence vote injects uncertainty into the situation.
There are serious concerns about the UK pound and how it might function if Scotland does vote to break free. Recently, Bank of England Governor Mark Carney warned Scottish stakeholders about some of the difficulties presented in terms of currency.
The Scottish National Party, which advocates independence, insists that Scotland would continue to use the UK pound as its currency, but policymakers in England insist that they won’t allow. Worries that Scotland could degrade the sterling with excessive borrowing and other practices give politicians pause.
Also weighing on the pound, and limiting its gains today, is the fact that the union including Scotland has been in effect for more than 300 years. There are concerns about the economic impact on the rest of the United Kingdom, should Scotland leave. Additionally, there are worries that other countries might leave the union as well.
At 10:41 GMT EUR/GBP is down to 0.7955 from the open at 0.7968. GBP/USD is up to 1.6235 from the open at 1.6211. GBP/JPY is up to 173.9320 from the open at 173.2295.
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