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Salmond accuses No camp of creating financial instability

ALEX Salmond has accused the main pro-UK parties of deliberately attempting to create instability in the financial markets in an effort to undermine his campaign for independence.

RESOLUTE: First Minister Alex Salmond said uncertainty was the result of the UK parties ruling out a currency union. Picture: Gordon Terris
RESOLUTE: First Minister Alex Salmond said uncertainty was the result of the UK parties ruling out a currency union. Picture: Gordon Terris

In an extraordinary attack during First Minister's Questions yesterday, he said the Conservatives, Labour and the Liberal Democrats were trying to ­generate instability "as a campaign tactic".

His comments, which were met with anger and astonishment, came after the Governor of the Bank of England, Mark Carney, revealed he was putting contingency plans in place to protect the economy amid fears that uncertainty over an independent Scotland's currency would cause a run on the banks.

Mr Salmond faced another day of questioning at Holyrood over his proposal to share the pound in a formal currency union between an independent Scotland and the rest of the UK.

The proposal has been ruled out by the three main UK parties and Mr Salmond has faced ­relentless pressure to spell out his preferred alternative since refusing repeatedly to do so during a live TV debate with Alistair Darling last week.

Yesterday he claimed the UK parties' move to rule out his "Plan A" was an attempt to create financial uncertainty and had sparked Mr Carney's intervention.

Replying to Scots Labour leader Johann Lamont, he told MSPs: "Johann Lamont and the Better Together campaign are trying to create uncertainty."

Referring to previous No campaign claims that the referendum could hit the economy, he added: "Just as the attempts on inward investment and jobs failed, so will the attempts to generate instability in the financial markets, thanks to the resolute intervention and action of the Governor of the Bank of England."

Welcoming the Governor's ­intervention, he added: "I am suggesting that it is the ­responsibility of the No campaign, which is deliberately trying to create instability as a campaign tactic."

His accusation drew an angry reaction from the Labour, Conservative and LibDem leaders at Holyrood.

Ms Lamont said: "The First Minister must understand that his prospectus for independence, without knowledge of what the currency would be, is what is creating uncertainty."

Tory leader Ruth Davidson accused him of "throwing a hand grenade" at the economy.

"He is the reason why the Governor is now being forced to prepare contingencies, and he is the reason why the headlines this morning are talking about capital flight and chaos," she added.

Mr Carney was quizzed about the currency union proposal at the launch of the Bank's quarterly Inflation Report on Wednesday.

Asked about warnings by a leading European bank that a Yes vote could spark a run on the banks as panicked savers moved their money south, he said "uncertainty about currency arrangements" could lead to instability.

He declined to outline his contingency plans, but yesterday economist Ronald MacDonald, of Glasgow University, said the Bank of England would be ­preparing to support Scottish banks in return for an under­taking to relocate to England.

He warned any currency union deal would quickly collapse, ­costing taxpayers south of the Border hundreds of billions of pounds.

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