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George Osborne: Scottish currency zone 'unlikely to work'

The case for an independent Scotland retaining the pound in a currency pact with the rest of the UK is "not clear", according to Treasury analysis.

Scotland becoming independent from the UK would "be a profound economic change for both states", it said.

In a speech later, Chancellor George Osborne is due to argue there would be an unbalanced relationship between an independent Scotland and its neighbour.

The Scottish government says a currency pact would be in everyone's interests.

Speaking to the Today programme's John Humphrys, Mr Osborne explained that "if Scotland wants to keep the pound the best way to do that is to stay in the United Kingdom."

He went on to say that if Scotland did vote for independence then Scotland could carry on using the pound sterling "but it would have have absolutely no control at all over it's currency or macro economic framework."

"It's unlike that the rest of the United Kingdom could agree to, or we could make work, a euro style currency zone with Scotland."

First broadcast on BBC Radio 4's Today programme on Tuesday 23 April 2013.

  • 23 Apr 2013