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The value of major Scottish companies has fallen by billions of pounds after the stock market was spooked by polling giving the yes vote a lead ahead of the referendum.
As Scottish minsters played down the significance of the YouGov poll that found yes had a narrow lead in the independence campaign, Edinburgh-registered Lloyds Banking Group – which owns Bank of Scotland – was the worst hit, with shares falling by £1.7bn, or 3.3% by lunchtime.
Nicola Sturgeon, Scotland's deputy first minister, said that while YouGov had given yes its first lead of 2%, another poll by Panelbase had shown independence support 4% behind – suggesting the race was still wide open. A third poll, by TNS, is due tomorrow.
"I don't think there's any doubt at all the momentum is with the yes campaign but there is no sense of our campaign taking anything for granted," Sturgeon said, hinting at fears the YouGov poll has raised yes camp expectations too high.
John Swinney, the Scottish finance secretary, offered a yet more cautious view, telling BBC Radio 4's Today programme that the independence vote was still behind in the overall polling.
"Obviously the momentum and movement in the campaign has been in our favour but I think it's a pretty fair assessment of the polls to show that the yes campaign still remains behind in general, we certainly are in the poll of polls."
Nicola Sturgeon, here with worshippers outside Glasgow central mosque, has played down poll lead. Photograph: Murdo MacLeod
Traders, meanwhile, reacted by sharply downgrading shares in major Scottish companies. Shares in RBS, also Edinburgh-based, fell by 2.8% – or £1.1bn – while the energy giant SSE's shares lost 2.7%, or £400m.
Currency market jitters over the impact of a yes vote on 18 September also intensified in the wake of the YouGov poll, with the value of the pound falling almost two cents against the US dollar to $1.614, a 10-month low. It has lost 6% since mid-July.
Shocked by the scale of the shift to yes, UK party leaders are now urgently trying to agree a joint statement later this week on devolution for Scotland to reassure worried no voters.
While Better Together campaigners insisted the YouGov poll was out of step with their polling, one UK minister involved in the campaign admitted: "I'm nervous rather than panicked. I think this just makes it real for everyone."
Sturgeon said the UK government could be blamed for the fluctuations in sterling because it had refused to have "sensible discussions" about a formal deal to share the pound if there was a yes vote. That would reassure the markets, she said.
"It's not unusual in political campaigns, or indeed on budget days, for the value of the pound to fluctuate. I think that would suggest that the financial markets see Scotland as a strong economy," she told BBC Radio Scotland.
Lloyds Banking Group was worst hit by stock market fears over Scottish independence. Photograph: Anthony Devlin/PA
The fright began on Asian markets on Sunday when Standard Life shares fell by 4%, or £400m, while shares in the engineering firms Babcock International – which runs civilian operations at Faslane submarine base and Rosyth naval dockyard – dropped 4.2%, or £233m, and Glasgow-based Weir Group fell by 1.8%, or £100m.
As traders braced themselves for further shifts towards yes in polls due within days, the Nobel prize-winning economist Paul Krugman said Scottish voters needed to "be very afraid" about the risks of independence.
Writing for the New York Times, Krugman said he found it "mindboggling" that Scottish voters were prepared to go independent without a deal to share the pound or have a central bank.
Warning Scotland's economy could crash, he wrote: "The combination of political independence with a shared currency is a recipe for disaster.
"Everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area."
Alistair Cotton, corporate trader at Currencies Direct, believes the pound could fall by at least 5% if voters chose independence.
"The prospect of protected negotiations will create a period of volatility in exchange rates, bonds and equities which will continue until concrete decisions over debt and currency are made," Cotton warned.
The Better Together leader Alistair Darling meets badge-wearing voter whilst campaigning in Edinburgh for a no vote in the Scottish referendum. Photograph: Andrew Milligan/PA
Oliver Harvey, foreign exchange strategist at Deutsche Bank, said the British public establishment is reacting with "rising panic" to Sunday's YouGov poll. He believes a yes vote on 18 September could derail the UK's economic recovery.
"The implications of a yes vote would be huge, and are magnified by the sense of institutional unpreparedness. This week the most senior official at the Treasury admitted that only now is a team being prepared to deal with the fallout."
Leaders from Labour, the Conservatives and Liberal Democrats are thrashing out the details for a joint statement in Scotland later this week where they are due to pledge to set up a cross-party commission and a new timetable for agreeing extra tax and legal powers for the Scottish parliament.
The rush to make a new offer on devolution, promised within hours of the shock poll result on Sunday, triggered accusations of panic and bogus bribes from Alex Salmond, the first minister.
He accused George Osborne of "a panicky last-minute measure because the yes campaign is winning on the ground". He added: "The evidence for that is overwhelming."
Osborne said the Tories, Labour and the Lib Dems would agree to discuss proposals involving "much greater" fiscal autonomy for Scotland. The details could be announced as soon as Tuesday; no campaigners insist this move has been planned for several weeks.
Offering Scotland more power over tax rates, spending and welfare, the proposals would be ready for implementation in the first Westminster parliamentary session after the 2015 general election, the chancellor added.
Alistair Darling, the leader of the Better Together campaign, said he always expected the polls to narrow close to the referendum, saying: "We are in the position now when every voter could potentially tip the balance."
He acknowledged that the no campaign needed to appeal to the heart as well as the head but argued the big question is what impact separation would have on family finances and whether Scottish people would be able to afford the NHS and pensions.
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