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Sterling fell sharply and UK borrowing costs rose on Tuesday after a poll showed Scottish voters were shifting rapidly towards support for independence.
With less than three weeks to go to a referendum that could end the 307-year-old political union at the heart of the UK, a YouGov survey for the Sun newspaper put the pro-union lead at just 6 percentage points, excluding undecided voters, down from 22 points less than a month ago and 14 points in mid-August.
The poll offers a huge morale boost to campaigners for a Yes vote in this month’s independence referendum, particularly since YouGov has consistently reported relatively low levels of support for independence compared with other pollsters.
“If even YouGov have it this close, then you better believe we're winning this folks,” tweeted one independence supporter.
The poll alarmed investors, who had previously viewed the chances of a vote for independence as being slim. The pound – which had already softened recently as the Bank of England appeared to play down the chances of an early rate hike – was down 0.5 per cent at $1.6533 against the dollar by mid-morning, while interest rates on 10 year gilts jumped 5 basis points to 2.434 per cent.
“With the Scottish independence referendum approaching, the narrowing of the opinion polls is having a more direct negative impact on [the pound],” said Hans Redeker, head of global currency strategy at Morgan Stanley.
Jane Foley, strategist at Rabobank, said investors were also buying protection in options markets against big swings in sterling around the date of the vote.
The new poll will fuel doubts about the performance of the cross-party pro-union Better Together campaign after a week in which its advertising strategy has been widely questioned.
The No camp lead had “collapsed”, with the independence campaign now “in touching distance of victory”, Peter Kellner, YouGov’s president, wrote in the Sun.
YouGov found that 48 per cent of voters said they would vote No to independence, with 42 per cent planning to vote Yes and 8 per cent saying they did not know or would not vote.
Analysts caution against reading too much into a single poll, but the latest result comes shortly after a poll by Survation that suggested support for independence had surged since a televised debate in which Alex Salmond, Scotland’s first minister, was generally seen as having outmatched Better Together leader and former chancellor Alistair Darling.
Angus Robertson, Scottish National party member of the UK parliament, said the poll confirmed surging enthusiasm for independence. “[The] grassroots campaign is delivering momentum,” Mr Robertson tweeted.
With undecided voters excluded, YouGov now puts the No camp’s lead at 53 per cent to 47 per cent for Yes – the same level reported by Survation. The new survey left the poll-of-polls collated by the What Scotland Thinks website at a record high of 55 per cent for No to 45 per cent for Yes.
“McSqueaky bum time”, said the Sun, adapting a phrase coined by Scottish football manager Sir Alex Ferguson to illustrate the nervousness of matches in the late stages of a closely fought championship.
The YouGov poll suggested increasing doubts among voters about the future of Scotland’s National Health Service if it stays in the UK and that many believed UK political parties’ rejection of a post-independence currency union was mere bluff.
Better Together has been mocked in recent days for a campaign advert featuring a woman with little apparent knowledge of the independence debate. On Monday, it unveiled a new line of posters that features people saying they would vote against independence because they loved their families.
Despite the narrowing polls, the UK government on Monday reiterated that it had not prepared any contingency plans for a Yes vote on September 18.