Possibility of Scotland Independence Weakens British Pound
I f you are traveling to the United Kingdom and suddenly find that you have greater purchasing power — or if you are a resident of the United Kingdom who is finding that goods and services abroad suddenly cost a little more — thank the people of Scotland who are voting for its independence.
The British pound is sharply lower against the United States dollar due to the possibility of Scotland independence, according to this article by Josie Cox and Tommy Stubbington of The Wall Street Journal. It dropped 1.4 percent to $1.6106 — its lowest level since November of 2013 — before bouncing back to $1.6150 as European stock markets closed yesterday. The euro gained 0.9 percent against the pound to £0.8007.
A majority vote of independence as a result of the referendum to occur on September 18, 2014 could result in Scotland becoming independent from the United Kingdom for the first time since May 1, 1707. The target date for the independence of Scotland is set for March 24, 2016.
Separation from the United Kingdom would not be an easy task by any means; in fact, it could be quite risky. For example, if Scotland became independent, would it drop sterling for the euro? How will its continued membership in the European Union be affected in the future? What will happen to the remainder of the United Kingdom?
Even a vote rejecting independence could benefit Scotland: Gordon Brown — a former prime minister of the United Kingdom — has set out a timetable for boosting the powers of the Scottish Parliament if voters reject independence.
These are very interesting times in the United Kingdom, to be certain; but travelers not based in the United Kingdom can at least reap the benefits of a weakened currency when visiting.
By the way, the United Kingdom of Great Britain and Northern Ireland is one of those places with two combined names in its official name.
I personally wonder if the independence of Scotland could once again prompt Québec to separate as an independent state from Canada; as well as the borough of Staten Island to secede from the city of New York — or New York City seceding from the rest of the state of New York…