The Standard & Poor's building is seen in New York. Picture: Jessica Rinaldi

London - Scotland would face a significant but not unsurpassable challenge if voters back independence in a referendum later this year, ratings agency Standard & Poor's said on Thursday.

While an independent Scotland would have the attributes of a wealthy investment-grade economy, it would face high levels of public debt, sensitivity to oil prices and potentially limited monetary policy flexibility, S&P said.

“At the same time, Scotland's external position in terms of liquidity and investment could be subject to volatility should banks leave,” the ratings agency said in a statement.

“On the other hand, if this were to happen, it could bring benefits in terms of reducing the size of the Scottish economy's external balance sheet, normalising the size of its financial sector, and reducing contingent liabilities for the state.”

Earlier on Thursday, insurance and pensions group Standard Life said it could move parts of its business out of Scotland if Scots split from the United Kingdom.

“In short, the challenge for Scotland to go it alone would be significant, but not unsurpassable,” S&P said. - Reuters