Scexit would cost Scots households fifth of annual income, says expert

Nicola Sturgeon has suffered a new blow to her Scottish independence plans after a leading economist warned homes in the country would see their budgets slashed by up to 20 percent in the event of ‘Scexit’. Glasgow University professor of macroeconomics Ronald MacDonald has forecast household spending would be cut by £7,300 for homes bringing in £35,000 a year. The expert cited the skyrocketing cost of interest rates and the resulting high cost of imports as having the most damaging impact on funds.In another blow to the First Minister’s plans, he has warned Scotland will have to shift to a new currency on a shorter timetable than planned by the SNP.In the event of a successful independence vote, Professor MacDonald believes the value of the currency will immediately shrink by between 20 and 30 percent and for the average home, imported goods will cost the equivalent of £4,300 more.The leading economist told the Sunday Times: “You’re talking in my view of a devaluation of between 20 percent to 30 percent. These are big numbers and they will affect people’s wages and they will affect people’s mortgages.”The key thing the SNP is not telling people is that financial markets bring events forward. The crisis will be brought forward to day one of independence. It’s obvious why they don’t want to talk about what will happen on day one of independence.” Nicola Sturgeon news: The First Minister’s independence plans have suffered a new blow (Image: GETTY) Nicola Sturgeon news: The SNP leader has been trying to argue the economic case for independence (Image: GETTY)The latest independence plan from the Scottish Government, published last month, said Scotland would establish its own central bank and adopt a new currency after a ‘careful and phased’ transition following independence.Ms Sturgeon set out her economic plan and said the transition from the British pound to a new Scottish currency should be as short as ‘practicable’.But Professor MacDonald warned financial institutions would push hard to the change and may have second thoughts about lending any money in the meantime.He said these institutions would also have doubts about taking the risk of being repaid with a devalued Scottish currency.READ MORE: Democrats’ postal vote victories hasve panicked Tories and Republicans Nicola Sturgeon news: The First Minister wants to hold an independence referendum in October 2023 (Image: GETTY)The leading economist believes to combat this, loans would carry high-interest rates that would be unaffordable for the Scottish Government.Robert Kilgour, a Tory party donor and founder of SBUK, said Professor MacDonald’s work “sheds light on economic plans that carry real risk not just for individual households but for businesses across Scotland”.Pamela Nash, chief executive of pro-UK campaign group Scotland in Union, said: “There is a global cost-of-living crisis and people are worried about feeding their families and heating their homes.”Instead of coming up with solutions, the SNP is only focused on making this even worse by cutting household spending power by a fifth.DON’T MISSRussian pundit loses it as she slams Kremlin for not ‘preparing’ [VIDEO]Rocked Russians have nowhere to hide as 500 pinpointed [LATEST]Putin could strip Russian passports from those who criticise war [REPORT] Nicola Sturgeon news: Ten Scottish constituencies with the highest percentage of IndyRef ‘No’ votes (Image: EXPRESS)”As this economist says, breaking away from the rest of the UK will only make life more challenging for hardworking families across Scotland.”There’s never a good time for a household to take a financial hit of this nature, but especially not through a worldwide financial crisis. Scotland’s positive future is with the rest of the UK, ensuring we can all get through this period together.’In response, the Scottish Government said: ‘As set out in the Economy Paper, the powers of independence would enable the Scottish Government to replicate the success of many neighbouring countries which are more prosperous, productive and fairer than the UK.”This would enable the Government to protect and support households across the country who are facing the growing cost of living crisis.”Scotland would continue to use the pound on independence until it is judged that conditions are suitable for individuals and businesses to move to an independent Scottish currency.’