Scottish Independence May Lead to Better UK Credit Rating, says Moody's

Moody's Ratings Services has revealed that Britain could gain a better credit rating if Scotland becomes independent because the country would take its debt burden with it.

However, according to the rating agency's latest note, Scottish independence is "unlikely" to impact the UK's credit rating if it doesn't accept its share of its debt.

It added that Scotland, as well as the rest of the UK, would be better off if the country formed its own currency and not stay within a union, in the event of independence.

"A potential currency union with the remainder of the UK would be credit negative if it were to materialise. However, cross-party opposition to such an outcome makes this unlikely," said Moody's.

"Scottish independence would eliminate the current fiscal transfers between Scotland and the remaining regions of the UK, marginally improving fiscal dynamics for the remainder of the UK given higher Scottish per capita public expenditures and Scotland's older demographic profile."

Scottish people will vote in an independence referendum in September this year and will be asked the straight "yes/no" question: "Should Scotland be an independent country?"

The could come as a conundrum for voters as the SNP, which is pushing for a yes vote in the September independence referendum, has continually told voters that it is likely that the country will retain the pound and has threatened to not pay its debt if the UK bars it from staying within a currency union.

Shadow Chancellor, Ed Balls, has voiced deep concerns over SNP's Alex Salmond's threats.

"Salmond is saying to people that you can have independence and keep the pound and the Bank of England. That is not going to happen," said Labour MP Balls.

"The idea that Salmond could hope to be credible as an international figure, negotiating with the European Union or the UK government, while he makes threats, which are so irresponsible he would renege on debt. I don't think that's taken seriously because if it was true it would be utterly catastrophic."

Britain's Chancellor George Osborne also said: "The SNP threat to walk away from the country's share of UK debt would mean punitively high interest rates for Scottish debt issuance."