Latest nowcasts of the Scottish economy

With 29th of March now behind us, but with the uncertainty remaining rather than resolved, we have produced a new nowcast for the Scottish economy for Q1 2019.

Since our last nowcast in early March we have received official estimates of GDP growth in 2018 Q4. These place growth in Q4 at +0.3%, slightly ahead of UK growth in Q4 of 0.2%.

This is in line with our last nowcast for Q4 2018 which put growth at 0.29%.

Services growth again outpaced the overall economy with growth of 0.5% in Q4 of 2018, but production sector growth was down -0.9% for the second quarter in a row.

These latest official data put overall growth in Scotland in 2018 at 1.4%, still significantly below long-run trend growth.

Turning to growth in Q1 2019, our latest estimate puts growth at 0.31%, or at an annualised rate 1.26%.

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April 8, 2019

Scottish child poverty targets

Tomorrow, new statistics on poverty and income inequality will be published. All indications are that levels of poverty and inequality are on the rise in the UK over the longer term, and Scotland is no different.

These statistics matter for a variety of reasons, not least because back in 2017, Holyrood voted to put into law a target to reduce relative child poverty in Scotland.

Publication will no doubt be overshadowed by the ongoing Brexit debate. But it’s important not to lose sight of the domestic policy agenda.

Too often the debate over poverty collapses down to a simple discussion about the level of re-distribution in the tax and benefit system.

But in reality, if Scotland is to meet its poverty targets then it’ll require a much more fundamental look at the Scottish economy and how it functions. For instance, we have record people in employment in Scotland, but rising poverty.

Ultimately, tackling poverty isn’t just a moral or societal problem, but also an economic problem that requires a system-wide look at how jobs are created, levels of investment in the economy, productivity growth and wage growth.

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March 27, 2019

Scottish Business Monitor Results – Q1 2019

The Scottish Business Monitor Results for Q1 2019 are summarised in the PDF below.

You can download the PDF here: https://www.sbs.strath.ac.uk/economics/fraser/20190325/Business-Monitor-Q1-2019.pdf 

March 25, 2019

Today’s Scottish GDP numbers – Brexit uncertainty yet to have a significant impact on key economic indicators

Today the Scottish Government published GDP figures for the final quarter of 2018. Growth for Q4 2018 was 0.3% – below trend but slightly faster than the UK as a whole. This comes on the back of yesterday’s labour market data which showed Scottish unemployment at its lowest rate since the ONS Labour Force Survey was first collected on a consistent basis in the early 1990s.

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March 20, 2019

Spring Statement 2019: route-map to an unlikely destination?

Shorn of major policy announcements, the Spring Statement is an opportunity for the Office for Budget Responsibility (OBR) to update its economic and fiscal forecasts, and for the Chancellor to announce policy reviews on everything from minimum wages to biodiversity.

So how have the forecasts changed since October 2018?Continue reading

March 13, 2019