Scottish independence: Pound slides to new low as investors brace for 'horrific' consequences

Volatility also edged up on Wednesday having already surged in the last week, signalling intense jitters among investors over the fate of the union.

^{Volatility in sterling-dollar trading has spiked after creeping up at the end of last week. Source: Bloomberg}

Jeremy Cook, chief economist at currency exchange company World First warned that the implications of a Yes vote "could be horrific".

“Until we receive a clear Yes or No vote, sterling will pitch and yaw with the results of each opinion poll. Global investors are uncertain as to the longer-term economic prospects of an independent Scotland and a broken union, and will continue to pressurise UK assets as long as this fear remains," he added.

A YouGov poll released on Sunday showed 51pc of voters backing Scotland’s exit from the United Kingdom in a hefty reversal of the Better Together campaign’s 22-point lead one month ago.

The news triggered sterling's biggest intra-day loss in more than a year, when it slid to $1.6150, its lowest level since November. That made it the worst performing major world currency on Monday. This follows last week’s decline of 0.7pc as support for the “Yes” campaign continued to rise.

A new TNS poll on Monday night did little to quell concerns, putting the anti-independence vote just one point ahead of the Yes camp and reinforcing beliefs that the race has dramatically narrowed in the last fortnight.

The pound is particularly vulnerable amid ongoing uncertainty about the outcome of the referendum, analysts say, especially in light of the pound's rally over recent months.

Sterling's slide has been compounded by investors piling into the US dollar after a Federal Reserve study suggested the American central bank could be mulling a rate rise sooner than expected.

Ian Williams, economist at Peel Hunt said the "knee-jerk" nature of yesterday's market moves were understandable since the likely economic and financial framework of an independent state "remains extremely vague".

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