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Westminster parties to rule out Scottish use of the pound

Kiran Stacey

Scotland will not be allowed to share the pound with the rest of the UK if it chooses independence, the three main Westminster parties are to warn as pro-unionists turn up the pressure ahead of the September vote.

George Osborne, the chancellor, Danny Alexander, the Liberal Democrat Treasury chief secretary, and Ed Balls, Labour's shadow chancellor, will all deliver separate warnings that Scotland should not expect to form a currency union with the UK in the event of independence, removing one of the central planks of the Scottish National party's policy platform.

(Read more: Scotland independence: Widnae it work?)

Peter Macdiarmid | Getty Images

The warnings mark an escalation of the unionist rhetoric, with all three major parties having thus far said only that it would be "very difficult" to form a currency union with an independent Scotland rather than ruling it out altogether.

The moves comes as polls show the independence cause gaining ground on the unionist side.

More from the Financial Times:
Scottish nationalists slam Cameron appeal
Report warns on Scottish currency union
Cameronand the case for the union

The SNP has made it a crucial part of its vision of independence that Scotland would be able to share the pound, rather than having to join the euro or establish its own currency.

But the Westminster parties believe the intervention by Mark Carney, the governor of the Bank of England, last month, makes it plausible for them to rule out a currency union entirely.

BoE's Carney on Scotland-UK currency union

During a visit to Edinburgh, Mr Carney highlighted the difficulties of a currency union between the two countries, saying: "A durable, successful currency union requires some ceding of national sovereignty."

While Alex Salmond, the SNP leader, welcomed that speech, the Westminster parties believe it has given them enough scope to reject outright his vision of a euro zone-style currency union underpinned by a deficit limit.

(Read more: Aye or naw? UK PM pleads with Scottish to stay)

Mr Osborne last week gave a flavor of his economic argument to the House of Lords economic affairs committee when he said: "Alex Salmond's claims about the currency were pretty effectively demolished by the governor of the Bank of England."

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