The economic policy landscape in Scotland

2018 promises to be an important year for the Scottish economy.

As the analysis in the latest Fraser Economic Commentary highlights, whilst the Scottish economy retains long-term strengths, early indications are that 2018 will be another challenging year.

Clearly Brexit remains the greatest headwind the Scottish economy faces.
We have argued on a number of occasions that the decision to leave the EU will damage Scotland’s long-term growth prospects.

Progress has been made with regard to the transition period the UK and the EU will operate within up to December 2020. But whilst this creates space for further discussion, most of the major economic issues with respect to the UK’s relationship with the EU post-Brexit remain unanswered.

In 2018 businesses will look for much greater evidence that the UK Government has a clear vision for life outside the EU that not only satisfies business but can also secure the necessary parliamentary support.

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March 28, 2018

Today’s Fraser of Allander Economic Commentary in 10 bullet points

 

Today – in partnership with Deloitte – we published our latest Economic Commentary.

Alongside the usual analysis of the Scottish economy there are some interesting articles from:

Here we summarise some of the key conclusions from our outlook section.

FAI Scottish Economic Forecasts - March 2018

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Today’s labour market data in brief…

New data on the health of Scotland’s labour market was released this morning. These provide an update on key indicators like unemployment and employment. In this blog we highlight the key features of these data and highlight some interesting trends.

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March 21, 2018

Spring Statement 2018

Today’s Spring Statement was expressly not a ‘budget’; it contained no new spending or tax policy announcements. Instead, it was an opportunity for the Chancellor to update parliament on the latest UK economic and fiscal forecasts.

It is only three and a half months since the Autumn Statement in November. The big statements then were about the major downward revisions to the forecasts for UK economic growth.

Today there was a smidgeon of relatively better news on the economy. GDP growth in 2017 turned out to be slightly higher than the OBR had expected, and it has also revised up its forecasts for 2018. But these upward revisions in the early years of the forecast are mirrored by slight declines in later years (the OBR has effectively reassessed its view of where we are in the ‘economic cycle’).

Moreover, the upward revisions are nowhere near sufficient to offset the downward adjustments in November (see Chart). UK growth of 1.5% in 2018 is still forecast to lag EU and US growth (forecast at 2.3 and 2.9% respectively by the OECD).Continue reading

March 13, 2018

How do consumer prices differ across the UK?

Last week the ONS released new data on differences in consumer prices across the UK.

While we get regular (monthly) updates on changes in consumer prices for the UK as a whole, there has long been an understanding that these UK average prices are likely to differ to at least some extent across parts of the UK (as anyone who has ever bought a pint of beer in London can attest!).

In this short blog, we will take a look at these data and see what they show about price differences across the UK. Differences in the price level across the UK (which is what these data show) is different from changes in the price level (which we do not have data on, except for the UK as a whole).

For a variety of reasons, not least arguments about differences in the purchasing power of households and household poverty more generally, differences in the price level can have big implications for our understanding of relative prosperity of households across regions.

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March 6, 2018