Goldman Sachs has warned that the UK could fall into a eurozone-style crisis if Scotland votes for independence later this month.
In some of the most bleak predictions economists have made about independence, the Wall Street bank said a “Yes” vote on September 18, while looking unlikely, “could have severe consequences” for both the Scottish economy and the UK overall.
Goldman warned that public services would have to be cut if Scotland goes it alone, and that the country would face much higher borrowing costs.
But the most worrying consequence, the bank predicted, would be that uncertainty over a currency union would cause a run on sterling and a capital flight with echoes of the eurozone crisis.
“The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style currency crisis occurring within the UK,” wrote Kevin Daly, senior economist at Goldman.
Here is more, from James Titcomb. You should consider that speculative, but it is worth putting on the table.