By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Not even hints of a rate hike from Bank of England Governor Mark Carney could distract investors from worries about the outcome of next week's referendum on Scottish independence as the FTSE 100 remained stuck in the red Tuesday for a third straight day.

The London benchmark fell 0.1% to close at 6,829.00, erasing a small gain seen at the open.

Scotland referendum: Traders are still nervous ahead of the vote on Scottish independence on Sept. 18. A poll that was released over the weekend put the pro-independence camp in the lead for the first time. However, other surveys still point to majority for the "no" campaign.

Economists at Credit Suisse in a note on Tuesday sketched out some of the risks of Scottish independence, saying Scotland would fall into a deep recession. They also noted that the pound would weaken and could fall to as low as $1.50. Read: Pound's selloff on Scottish uncertainty isn't over

The pound(GBPUSD) got creamed in Monday's trade, and continued to drift south on Tuesday. Sterling bought $1.6093, compared with $1.6110 late Monday in New York. Comments from BOE's Carney briefly gave sterling a lift after he said the central bank will likely meet its inflation and jobs goals if it starts to raise its benchmark interest rate early next year.

Data: The Office for National Statistics said industrial production climbed 0.5% in July, beating market expectations of a 0.3% rise.

Rob Wood, chief U.K. economist at Berenberg, called the numbers "solid", but cautioned that growth in industrial production should start to slow over the next couple of months when the "effect of fighting in Ukraine on core-eurozone business confidence feeds through to the U.K."

Movers: Wm Morrison Supermarkets PLC climbed 3.1% after Citigroup upgraded the supermarkets chain to buy, according to Dow Jones Newswires. Other retailers rose in step, with Marks & Spencer Group PLC up 1.3% and J Sainsbury PLC gaining 0.6%.

Shares of Lloyds Banking Group PLC (LYG) put on 1.5% and Barclays PLC (BCS) rose 0.4% as HSBC lifted the two banks to overweight from neutral. HSBC said that the expected hike in U.K. interest rates would -- contrary to what it described as the conventional wisdom -- let them make more money from their retail operations.

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