As a Londoner I suspect we'd all benefit from having different monetary policy in London and the rest of the UK. The argument I've heard is that fiscal and monetary policy have to be applied together, so it makes sense to have currency controlled at the same level as taxation.
It's a weird concept money, and I wonder what the right level is. I doubt it is optimised at the country level, but then a "better" notion like demographic similarity may be impractical, even if better, e.g. one currency for Northern Italy and one for Southern may be difficult to sell even if preferable, and ditto a unified Basque/southern French currency, or an eastern seaboard Yuan and a country China currency.