London Daily

Focus on the big picture.
Saturday, Feb 14, 2026

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

Pound falls to lowest level since COVID crash after Nicola Sturgeon claims 'mandate' for Scottish independence referendum

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," says Fahad Kamal, chief investment officer at Kleinwort Hambros.

The pound has fallen to its lowest level against the dollar since the onset of the pandemic, fuelled by concerns about the economy and the prospect of a second Scottish independence referendum.

Scotland's First Minister Nicola Sturgeon said earlier that her government had an "indisputable mandate" for another vote and was ready to set out more details of how this could be achieved without the approval of the UK government.

Sterling dropped below $1.20 for the first time since March 2020 - a drop of more than 1.2% on Tuesday.

When compared with the euro, the pound slumped 1.2% to 86.81p, its lowest point since last May.

"If I were to isolate the move lower down to one event, I'd most probably say that the Scottish independence risk was the straw that broke the camel's back," said Simon Harvey, head of FX analysis at Monex Europe.

Since the beginning of the year, sterling has fallen more than 11% with much of that decline attributable to a strong dollar - a safe haven for global investors in times of economic shock.

However, concerns about UK growth - tipped to be weaker over the coming months than in most rich countries - has added to the gloom for the currency.

There is added uncertainty about how fast the Bank of England can increase interest rates - which is needed to control soaring inflation - without causing economic damage.

Fahad Kamal, chief investment officer at Kleinwort Hambros, said the possibility of a new Scottish independence vote was "really bad news across a number of things".

"The UK has huge imported energy inflation and it is getting hit on both sides - from oil prices going up and sterling weakening," he said.

"It is putting Britain on a dangerous inflation trajectory and there is very little the Bank of England can do."

Typically, a fall in the value of sterling makes imports even more expensive, potentially contributing to inflation further.

Data released by the Office for National Statistics earlier this week unexpectedly showed that the UK economy contracted by 0.3% in April.

Newsletter

Related Articles

0:00
0:00
Close
Mayor of Serdobsk in Russia’s Penza Region Resigns After Housing Certificates Granted to Migrant Family Trigger Public Outcry
Pentagon Reviews Anthropic Partnership After Claude AI Reportedly Used in Operation Targeting Nicolás Maduro
President Donald Trump and Hip-Hop’s Political Realignment: Pardons, Public Endorsements, and the Struggle Over Cultural Influence
China’s EV Makers Face Mandatory Return to Physical Buttons and Door Handles in Driver-Distraction Safety Overhaul
Goldman Sachs and DP World Executive Resignations: Elite-Reputation Risk and Corporate Governance Fallout From the Epstein Disclosures
‘Amelia’: The UK Government’s Anti-Extremism Game Villain Who Became a Protest Symbol
Peter Mandelson Asked to Testify Before US Congress Over Jeffrey Epstein Links
Walmart's Earnings and UK Economic Data Highlight Upcoming Financial Trends
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
SpaceX's New Vision: Lunar City Takes Precedence Over Mars Colonization
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
Document Suggests Prince Andrew Shared UK Briefing on Afghan Investment Opportunities with Jeffrey Epstein
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
McDonald's Shortens Breakfast Hours in Australia Due to Egg Shortage
Heineken announces cut of 6,000 jobs due to declining beer demand
Beijing Brands UK Hong Kong Visa Expansion ‘Despicable and Reprehensible’ After Jimmy Lai Sentencing
Tesco Chief Warns UK Is ‘Sleepwalking’ Toward a Joblessness Crisis
Trump’s ‘Act of Great Stupidity’ Comment on UK Chagos Deal Reverberates Through Diplomacy and Strategy
New U.S. filings say Jeffrey Epstein repaid Les Wexner one hundred million dollars after theft allegation
Commerce Secretary Howard Lutnick acknowledges 2012 visit to Jeffrey Epstein’s private island as lawmakers scrutinise past ties
Helsing and Stark Defence loitering-munition drones and Germany’s race to industrialise battlefield autonomy
UK orders deletion of Courtsdesk court-data archive, reigniting the fight over who controls public justice records
UK Police Review Fresh Claims Involving Prince Andrew as Senior Royals Respond to Epstein Files
Keir Starmer’s Premiership Faces Unprecedented Strain as Epstein Fallout Deepens
Starmer Vows to Stay in Office as UK Government Faces Turmoil After Epstein Fallout
China and UK Signal Tentative Reset with Commitment to Steadier, Professionally Managed Relations
UK Confirms Imminent Increase in ETA Fee to £20 as Entry Rules Tighten
UK Signals Possible Seizure of Russia-Linked ‘Shadow Fleet’ Tanker in Escalation of Sanctions Enforcement
Epstein Scandal Piles Unprecedented Pressure on UK Prime Minister Keir Starmer’s Leadership
UK’s ‘Most Romantic Village’ Celebrates Valentine’s Day and Explores the Festival’s Rich History
The Implications of Expanding Voting Rights to Non-EU Foreign Residents in France
Ghislaine Maxwell to Testify Before US Congress on February 9
Al.com Acquired by Crypto.com Founder for $70 Million
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
US and Iran to Begin Nuclear Talks in Oman
Winklevoss-Led Gemini to Slash a Quarter of Jobs and Exit European and Australian Markets
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
NASA allows astronauts to take smartphones on upcoming missions to capture special moments.
Trump administration to launch TrumpRx.gov for direct drug purchases
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Epstein Case Documents Reignite Global Scrutiny of Political and Business Elites
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
UK Royal Family Faces Intensifying Strain as Epstein-Linked Revelations Rock the Institution
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
×