Brexit And The Scottish Economy: Don’t Panic But Do Worry!

by Brian Ashcroft, Fraser of Allander Institute. First appeared on Scottish Economy Watch.

In this blog I shall set out some notes on the nature and direction of the impact of Brexit on the Scottish economy. The Fraser of Allander Institute will be revising its forecasts of Scottish GDP growth, job creation and unemployment in the coming weeks in the light of Brexit where specific numbers will be put on the forecast effects. This blog should in no way be seen as anticipating what the Fraser of Allander Institute will forecast or the nature and direction of anticipated effects identified by the Institute. What I write here is my personal view.

It is useful to use the analytical time frames of the short run and the long run in considering the economic effects of Brexit – see the excellent analysis by theNational Institute for Economic and Social Research back in May.

By the short run, I mean a time horizon that stretches from now until roughly the end of 2017. By the end of 2017 the medium to long-term effects gradually start to kick in. But such effects only begin to make themselves felt after Britain has gone through the Article 50 process and finally leaves the EU with a new trading relationship between the EU and the UK agreed and that won’t be until 2019 or even later.

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June 30, 2016

Welcome to the Fraser of Allander Institute’s new blog!

The ‘Fraser’ has been monitoring and commenting on the Scottish economy for over 40 years. These are exciting times for the Fraser. We’re benefiting from new investment by the University, research bodies and private benefactors which is helping to expand our research team and widen our coverage of real-world economic issues. Read more about our plans here.

There has never been a more important time for impartial analysis and scrutiny of Scottish fiscal and economic policy. Constitutional change is well underway, with no fixed horizon in sight, and with this change comes challenges and opportunities for the Scottish economy. The fiscal responsibilities of the Scottish Parliament are expanding rapidly, with new powers over both taxation and public spending being devolved from Westminster. The recent decision by the UK to leave the European Union will not only have far reaching – and serious – economic implications for the Scottish economy for years to come, but it has also fuelled demands for Scotland to chart a different course in Europe, and even to hold a second Scottish independence referendum.

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