The fall in the price of oil has left Scotland facing a bigger budget deficit, should the country vote for independence

An independent Scotland would have to plug a gaping hole in its public finances or face “downward pressures” on its credit rating, according to a senior director at ratings firm Moody’s — a prospect that could see the rating enter “junk” territory.

At the time of the last independence referendum in 2014 Moody’s said an independent Scotland’s rating would have been in range of A to Baa. Since then, a fall in the oil price has left Edinburgh facing a bigger budget deficit, said Colin Ellis, Moody’s chief credit officer for Europe, the Middle East and Africa.

Sub-investment grade ratings start at Ba, one notch below the lowest Baa rating. A fall into so-called junk territory would leave Scotland on a par with Azerbaijan and