Scottish independence: Pound slumps as poll reveals Yes campaign's shock lead

Sterling dropped to a 10-month low as support for independence peaked

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The Independent Online

The pound slumped to a 10-month low on Monday as the Yes campaign took a surprise lead for the first time – just 10 days ahead of the Scottish referendum.

The one per cent decline to just 1.62 versus the US dollar adds to sharp losses seen last week after an earlier poll revealed gathering momentum for the independence campaign. Sterling had been at a six-year high above the 1.70 barrier as recently as the end of June.

Yesterday a YouGov poll by The Sunday Times put the “Yes” to independence campaign at 51 per cent against the “no” camp at 49 per cent, overturning a 22-point lead for the unionist campaign in just a month.

The two-point advantage, which excludes those who do not know or do not propose to cast a ballot, is within the margin of error and suggests the result is too close to call.

But the news has sparked a frantic fight back from supporters of the union. Chancellor George Osborne promised that a "plan of action to give more powers to Scotland" would be unveiled in the next few days, detailing the timetable and process of any further devolution.

He told BBC1’s Andrew Marr Show: “The timetable for delivering will be put into effect the moment there is a No vote in the referendum.

“The clock will be ticking for delivering those powers, and then Scotland will have the best of both worlds.”

However, the move was dismissed by First Minister Alex Salmond as a “panicky bribe”. He said: “This is a panicky measure made because the Yes side is winning. They’re trying to bribe us, but it won’t work as they have no credibility left.”

Prime Minister David Cameron, who spent the weekend with the Queen at Balmoral, will this week attempt to convince sceptics that Scotland will get significantly more autonomy even if independence is rejected.

 Meanwhile, Labour is deploying some of its biggest beasts to try to halt the apparent nationalist surge - with Ed Miliband also stressing that extra powers will start being devolved "right after" a No vote.

Michael Hewson, an analyst at CMC Markets, said: "For quite some time investors had dismissed the prospect of a Yes vote as an outlier, but recent opinion polls have shifted that perception and this has been no better demonstrated than by the plunge in sterling this morning."

Uncertainty over the currency that an independent Scotland would use, and the shape and role of its monetary system have dogged markets.

Mr Hewson added: "One thing is certain, if we get this sort of volatility on the prospect of a Yes vote, can you imagine the reaction if we do get a Yes vote? It's not likely to be pretty."

Additional reporting by agencies