Scottish 'Yes' vote poses significant risk to UK growth forecasts - Reuters poll

By Jonathan Cable LONDON (Reuters) - If Scotland votes for independence next week, existing consensus forecasts predicting Britain will enjoy some of the best economic growth in the developed world could well be scuppered, a Reuters poll found. The latest opinion polls put the outcome of the September 18 referendum as to whether Scotland goes it alone a close call and 15 of the 18 economists quizzed by Reuters this week said a "Yes" vote posed a significant or highly significant risk to their forecasts. Five said it was highly significant and two were neutral. Only one said insignificant. "A Scottish vote for independence would have a major negative influence on sterling and create considerable uncertainty over the economic prospects for the British isles," said Stephen Lewis, economist at ADM ISI. Current forecasts suggest Britain's economy will grow 0.7 percent this quarter and then 0.6 percent per quarter through to the end of next year. Growth will average 3.0 percent this year and 2.6 percent in 2015, the poll of nearly 60 economists taken this week found, making it one of the fastest growing rich-world nations. The euro zone, Britain's largest trading partner will only eke out 0.8 percent growth this year and the United States economy, the world's largest, will only expand 2.1 percent, according to the latest Reuters polls. With the UK economy on a sound footing, alongside inflation and wage growth picking up, the Bank of England is expected to begin raising interest rates from their record low of 0.5 percent early next year, in line with recent Reuters polls. FIRST MAJOR Such a move would rank it as the first major central bank to raise rates. But it will do so only gradually, with medians suggesting an initial 25 basis point hike in the first three months of next year followed by similar rises in subsequent quarters. Only six economists had a move pencilled in before this year is out and just three expected Bank Rate to still be at 0.5 percent by the time the April policy decision meeting comes around. Governor Mark Carney said on Tuesday the Bank may start to raise interest rates next spring if the labour market continues to recover from the financial crisis. Average earnings are expected to grow faster than inflation from early next, the poll found. That would mark a break from a trend since June 2008 when they were outpaced by inflation. Unemployment has also plummeted in Britain, falling to the lowest rate since late-2008 at just 6.4 percent in the three months to June. "With many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer," Carney said in Tuesday's speech to representatives of trade unions. In August, Martin Weale and Ian McCafferty became the first two members of the Monetary Policy Committee to vote for an increase in Bank Rate in more than three years, but everyone in the poll said only two voted for a change this month as well. (Polling by Ishaan Gera and Diptarka Roy Editing by Jeremy Gaunt)