Sterling dropped as opinion polls highlighted the risk Scotland will vote for independence next week, potentially splintering the U.K.’s 307-year-old union.
Britain’s currency slid to the weakest against the dollar since November after a poll by YouGov Plc showed the Scottish independence campaign gained a lead for the first time this year with the vote looming on Sept. 18. That extended last week’s biggest plunge in 14 months. A “Yes” vote would raise the prospect of a more cautious approach from the Bank of England, which this month kept its key interest rate at a record-low after persistent weakness in inflation and wage growth reinforced the case for maintaining emergency stimulus.
“This ensures that even if Scotland votes ‘‘No’’ next week the issue will not go away,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland. “The GBP was under pressure as markets consider there to be little credible planning for a ‘‘Yes vote’’ with a large number of unresolved questions expected to cause a halt in business investment and keep the BoE on the sidelines should Scotland vote ‘‘Yes’’.”
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