THE pound has fallen against the euro and dollar amid growing concerns Nicola Sturgeon is set to spark a fresh political crisis by calling a second Scottish independence referendum.
Sterling was down by around 0.6 per cent against the euro to €1.173 and 0.3 per cent against the dollar to $1.242 in early Monday trading.
Theresa May’s Government is braced for the Scottish First Minister to demand another vote to leave the United Kingdom, as Article 50 is triggered, according to reports.
The Scottish National Party has claimed Brexit means Scotland should be given another referendum for independence.
If Mrs Sturgeon gets her way, a fresh Scottish vote would reportedly be held next year – during the peak of Brexit negotiations.
Joshua Mahony, market analyst at IG, said: “The pound has seen substantial selling at the open today, following reports that Theresa May will push for the almost certain Scottish referendum to take place post-Brexit.
“This is all about leverage, with a united Britain representing a stronger hand when it comes to Brexit negotiations.
“At a time when businesses and individuals alike are struggling to prepare for the UK’s exit of the EU, there is a good chance they will also have to deal with the breakup of the UK, should the Scottish choose to leave.”
Experts said the pound could also be troubled by the prospect of Mrs May clashing with Brussels over freedom of movement to Britain.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The pound has come under pressure in Asia early on with some reports suggesting that the Scottish government could look to call another independence referendum sometime next year.
“Though the weakness may well have also been prompted by other reports that UK Prime Minister Theresa May could well introduce curbs on freedom of movement at the same time as she comes to trigger Article 50 at the end of March.
“It is reported that any EU national who arrives here after that date would not automatically have the right to stay in the UK permanently.
“This may set the stage for early disagreements with EU leaders before talks even get under way.”