AN independent Scotland would begin life with a budget deficit three times higher than the UK's, according to a firm of economic forecasters.

The Centre for Economics and Business Research (CEBR) is the latest voice to predict much greater austerity north of the border than south of it in 2016-17.

Its London-based chairman, Douglas McWilliams, said his team had calculated Scotland's deficit in the first full year of independence at 6.4 per cent of GDP, compared with just 2.2 per cent in England, Wales and Northern Ireland. The CEBR is even more pessimistic than the "black hole" deficit of 5.5 per cent predicted by the IFS and much quoted by Better Together politicians.

In a strikingly bleak view of the future, Mr McWilliams said: "All this of course assumes that the Scottish tax base is sustained in the independence scenario.

"But with uncertainty hindering investment, Scotland has been growing more slowly than England in recent years.

"And it is clear that part of the financial service sector would have to leave Scotland if it were independent. And of course there are also start-up costs for an independent country which CEBR estimates at a total bill of £2.4 billion though this would be phased in over a number of years.

"The new government would have to issue around £9bn of new bonds which would certainly have to be sold at a substantial interest rate premium, if indeed they could be sold at all.

"It is deeply ironic that Scotland might even start its independence already in the hands of the IMF."

A spokesman for Yes Scotland said: 'The authors of this report don't seem to have studied the facts. In the five years to 2012/13, Scotland has been in a stronger financial position than the UK as a whole to the tune of £8.3bn, or £1,600 per person."