It has been widely publicised that the Scottish budget may face income tax ‘reconciliations’ totalling £1bn over the next few years. But what are these reconciliations and why do they come about? Do they tell us anything about Scotland’s economic performance, or do they just reflect forecast error?Continue reading
This blog shows that council tax rates are now markedly lower in Scotland than in England and Wales. Increasing council tax in Scotland to match rates in Wales (or England) would raise substantial revenues, but would have adverse distributional implications. On balance, the case for more fundamental reform of property taxation would appear much stronger than the case for increasing rates within the existing system.
Differences in income tax policy between Scotland and rUK have been the subject of heated debate. There has been relatively little attention paid to differences in council tax policy in Scotland compared to England and Wales. But in some ways, the differences in council tax policy are more pronounced than they are for income tax.Continue reading
This morning the latest UK data for growth in Q1 2019 were released. These put UK growth at 0.5% in Q1, with growth in production, construction and service sectors.
In this blog we release our nowcasts of the Scottish economy in Q1 2019 and Q2 2019.
The UK numbers were stronger than growth in the previous quarter (which was a disappointing 0.2%), and stronger than might have been expected.
Last week the Governor of the Bank of England warned that Brexit has created a “high level of uncertainty” and “companies are holding back on making big decisions”.
Earlier this month, the Bank cut its growth forecast to just 1.2% for 2019. If this turns out to be correct, this will be the slowest year of growth since the financial crisis.
Not all of this is down to Brexit.
Some of the revision reflects a weaker global economic outlook – with data out last week showing that Germany has just avoided entering recession by the narrowest of margins.
With the data pointing to a lowing UK economy, what is the latest data telling us about how well the Scottish economy is holding up?Continue reading
Today’s Scottish GDP figures – for the 3-month period to September 2018 – showed a further pick-up in economic activity in Scotland. The Scottish economy expanded by 0.3% over the 3-months to September (Q3). This followed growth of 0.5% in quarter 2 and 0.4% in quarter 1.
The economy has been growing on a continual basis for five consecutive quarters, the most sustained period of growth in a long-time. However, growth remains below trend, with output lower than UK growth of 0.6 this quarter.
In this blog we provide a quick summary of the key trends.