Economists warn of dangers to Scotland of ‘sterlingisation’

Some of the world’s leading economists have issued stark warnings of the dangers an independent Scotland would face after leaving the UK’s sterling currency zone.

Speaking to These Islands for a report on the currency issue, Dame DeAnne Julius, a founding member of the Bank of England’s Monetary Policy Committee and a former chief economist at British Airways and Shell, described Nicola Sturgeon’s plan to continue to use the British pound outside of the official sterling currency zone or – ‘sterlingisation’ – as “a hugely risky experiment for Scotland”.

She explained: “The evidence one could look to for this kind of arrangement are places that are quite different and at a different development level – places like Argentina – and it’s impossible, I think, to find any place that is a success story undertaking this route of political independence using a currency issued by another country.”

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