Would an independent Scotland be refused an AAA rating?

Would an independent Scotland be refused an AAA rating?


Could the YES vote be affected by possible downgrading?

The front page of the Financial Times this morning is carrying a story by its Economics Editor, Chris Giles, about the sovereign debt rating that a new independent Scotland would receive.

Giles writes that the paper has been told that an independent Scotland would not be able to count on receiving triple A status – something that could potentially lead to higher borrowing costs. His report goes on:-

“Scotland could expect to receive an investment grade rating, but some notches below triple A, one agency told the FT privately….”

One of the factors that determine AAA status is whether countries have a long record. Giles quotes the Moodys published methodology that “Immature economic and political institutions increase the risk of unpredictable behaviour in times of stress…”.

A main plank of the NO campaign will be to create an uneasiness amongst voters of the implications of leaving the UK and this story feeds right into that.

This is a challenging one for YES to deal with and you could see stories like this dominating the headlines in the weeks and days leading up to the vote.

Mike Smithson @MikeSmithsonOGH

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