On September 18, Scotland will vote on whether it wishes to continue to be part of the United Kingdom or become its own nation for the first time in more than 300 years. An independent Scotland could have huge ramifications for England, the European Union, and even the world, as nations and peoples find their economies, politics, and diplomacy roiled by a new world order.
But discussions of global politics aside, let’s talk about what really matters: What does this all mean for Americans wanting to save a few bucks traveling to London this fall? On that front, an independent Scotland looks absolutely awesome.
For years, spending a few weeks in England has been difficult for American tourists, and not just because many Brits tend to feel near-French levels of hostility towards us Yanks (going back quite some time). The English pound has hovered well above the dollar for decades, reaching an exchange rate of two to one in 2007. Since then, the pound has fallen a bit, but it still remains frustratingly valuable relative to the dollar. One pound sterling is currently equal to about $1.62, meaning a trip to U.K. can be an extravagance for even well-off Americans.
But that could all change if Scotland leaves the United Kingdom behind. According to a recent Bloomberg survey of economists, a majority believe a “yes” vote for Scottish independence could cause the pound to drop 10% in value relative to the dollar. In contrast, 63% of surveyed economists said the English currency could jump up to 5% on a “no” vote, with a minority predicting an increase as high as 10%.
The takeaway here for American travelers looking to visit Buckingham Palace is that a vote for independence could make your trip a lot cheaper. American Express estimates the average family spends $1,145 per person while on vacation, which amounts to a total of $4,580 for a family of four. If the pound falls 10% from its current levels (from $1.62 to the $1.46 suggested by Bloomberg’s economists), that sum of money could buy £3,137. But if the union prevails and the pound gains 5% of its value (raising the price of the pound to $1.71), our example family can only purchase about £2,676.
That means the difference between an independent Scotland and still-united United Kingdom, at least for the American trraveler, is £461—the equivalent of $755 at the higher exchange rate. In short: American tourists will save almost $800 if Scotland goes its own way. With that kind of cash, you could even make a stop in Edinburgh and thank the Scots for the extra dough.
Just don’t brag about your savings at an English pub.