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Sterling shaken by Scotland poll shock

Monday, September 08, 2014 - 02:10

Sterling fell to a 10-month low while British shares and government bonds showed strains, as a poll put the campaign for Scotland to split from the rest of the UK in the lead for the first time. As Sonia Legg reports with just 10 days to the final vote the poll has left many in Britain nervous.

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It wasn't just news of another royal baby making headlines in Scotland - the possible birth of a new country was also causing much excitement. Scotland could be well on the way to independence by the time Prince George's sibling is born. A new poll showing the Yes campaign leading for first time sent sterling to a 10-month low. British shares and government bonds also showed signs of strain and 6 of the FTSE's 10 biggest fallers were based in Scotland. Jeremy Stretch is Head of FX Strategy at CIBC. (SOUNDBITE) (English): JEREMY STRETCH, HEAD OF FX STRATEGY, CIBC, SAYING "If there were to be a Yes vote then further uncertainly is the obvious scenario. We will then have potentially months, if not years of negotiations to go through what is going to be a less than amicable divorce." Shares in Edinburgh-based Lloyds Banking Group and Royal Bank of Scotland were among the fallers - down more than 2%. And some economists believe an independent Scotland won't be able to keep such large banks. The government coughed up 66 billion pounds to keep them afloat during the financial crisis Getting that back would certainly be complicated by independence. The government denies it is panicking but its response was swift - Deputy Prime Minister Nick Clegg offering Scotland new powers. (SOUNDBITE) (English): NICK CLEGG, DEPUTY PRIME MINISTER, SAYING: "For the first time in my political lifetime there is a clear unwavering unity on this question. Finally, everyone who believes in the United Kingdom, believes in more power and more control for Scotland in Scotland." It's the late hour of this new development which is so significant. There's only 10 days until the vote. Scottish deputy leader Nicola Sturgeon is from the Yes campaign. (SOUNDBITE) (English): NICOLA STURGEON, SCOTLAND DEPUTY LEADER SAYING: "People, I believe, are coming to the conclusion that if we want the meaningful powers to protect public services, create more jobs in our economy and always get the government that we vote for then the only way to get them is to vote yes." The Queen - who's holiday home is in Scotland - is watching the vote with interest too She always remains neutral in any debate. But privately she's said to be concerned by the latest developments, even with the prospect of a new great grandchild.

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Sterling shaken by Scotland poll shock

Monday, September 08, 2014 - 02:10