AN independent Scotland should unshackle itself from the “volatile” and “vulnerable” pound sterling and have its own currency, think tank Business for Scotland has claimed.

In a discussion paper titled Clarity Economics, published ahead of a report by the SNP’s Growth Commission, the pro-independence business network says the Scottish Government’s 2014 policy of a formal currency union with the rest of the UK is simply not fit for indyref2.

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The question over what currency an independent Scotland would use dominated the campaign in the run-up to the 2014 referendum.

In the independence White Paper, the Scottish Government said “retaining Sterling as part of a formal Sterling Area with the UK would be the best option” for both Scotland and the rest of the UK.

The then Chancellor George Osborne, his deputy, LibDem Danny Alexander, and Labour’s Shadow Chancellor Ed Balls completely ruled out the prospect, saying the economic and political risks of underwriting another country’s economy were too great.

Alex Salmond said it was not a decision for Westminster, and suggested Scotland could keep informally using the pound, a policy that became known as Sterlingisation.

“We are keeping the pound in a currency union [because] we are appealing to the greatest authority of all – that is, the sovereign will of the people of Scotland,” he told Holyrood in the August of 2014.

“It’s Scotland’s pound and we are keeping it.”

Last year, he called for the debate on the currency to be refreshed.

“We’re in different times, this is not 2014 … and you have to anticipate two, three, four years’ time,” the former First Minister told an audience at the Edinburgh Fringe.

It’s one of the questions Nicola Sturgeon has tasked her Growth Commission to grapple with.

Part of the remit given to the group, set up in September 2016 and chaired by former SNP MSP Andrew Wilson, was to examine “the projections for Scotland’s finances in the context of independence”.

That would include looking at the best “monetary arrangements”.

Its report is believed to be imminent, and sources have hinted that it may even come in the next few weeks.

In its argument, Business for Scotland says the value of Sterling is likely to fall post-Brexit. This, it says, would mean international imports becoming significantly more expensive, which in turn would present Scotland with an advantage if it was, in the short term, to keep the pound.

The group writes: “Just as the policy to offer a currency union was the correct one (in economic terms) in 2014, following Brexit it is now the correct answer for Scotland to launch its own currency after independence.

“The rUK government would, however, be well advised to seek a currency union with an independent Scotland, but they would have to make a very good offer and to give assurances that united monetary policy would match the needs of Scotland as well as the rUK before the Scottish Government should consider that offer in independence negotiations.

“The negative economic impacts of Brexit will necessitate flexibility in the short term when launching a Sovereign Scottish currency, as post-Brexit Sterling will likely fall significantly in value.

“Scotland can take advantage of that outcome through Sterlingisation for a transitional period, so that goods and services sold to the rUK from an independent Scotland would have a significant international price advantage and therefore Scotland’s trade with the rUK would significantly increase post-independence, as the rUK would not be able to afford products from outside the Sterling zone.

“At the time that is best for Scotland’s economy, a Scottish currency should be launched, but to begin with that may need to be pegged to Sterling to continue facilitate trade. Eventually though, full monetary policy flexibility will be available.”

A Business for Scotland spokesperson said the full report, due to be published this week, was about realising that “our society’s and economy’s problems cannot be answered by polemic governments with half the answers, or centrist parties with a populist mishmash of whatever might win votes next week.

“As a result, this document often contains radical policies and new economic thinking that goes way beyond the simplistic calls of ‘don’t raise business rates’, ‘cut red tape’ and ‘please don’t raise the minimum wage’ fodder presented by most traditional thinking business groups.”