Fraser of Allander Institute Blog

What might happen to Scotland’s economy in the event of ‘no deal’?

The prospects for ‘no deal’ to be agreed between the UK and the EU have increased in recent weeks.

A lot has been written about the potential long-term economic implications from Brexit. All else remaining equal, the larger the economic barriers between Scotland and its main international trading partner, the greater the potential hit to the country’s growth potential.

But very little has been written about what the implications might be in the short-run from ‘no deal’….beyond “bad” or “very bad”.

In this blog we try to unpick some of the key issues surrounding what a ‘no-deal’ might mean for the economy and just why it is so difficult to forecast.

Funding higher education tuition and maintenance support in Scotland – recent changes and ongoing debates

In addition to providing an overview of key issues facing the upcoming Scottish budget, each year our annual Scottish Budget report includes an in-depth analysis of specific fiscal policy issues. In this year’s report, one of the topics we looked at was higher education.

Our analysis did not make any recommendations, contrary to some media reports, but instead sought to:

• Consider the implications for Scottish graduates of recent changes to the terms of maintenance loans in Scotland;

• Understand what constraints the Scottish Government faces in determining how much loan it can offer to Scottish students, and on what terms; and

• Quantify the opportunity costs of the government’s current approach to funding higher education tuition. Continue reading

Nowcasts of the Scottish Economy

Grant Allan & Stuart McIntyre
http://www.nowcastingscotland.com
Fraser of Allander Institute, University of Strathclyde

Labour Market data released later this morning will provide an update on how the Scottish labour market performed over the three months to the end of September.

In general the labour market has provided good news in recent years, with near record low unemployment and near record high employment. In contrast, economic growth has been weaker.

Recently it appears that growth may be beginning to pick up.

Key points from our 2018 budget report

Today we publish our annual Budget report, “Scotland’s Budget 2018” which is available at the following link.

The aim of the report is to set out the opportunities, risks and choices facing the Scottish Government as it prepares it draft budget for 2019/20. The report covers the outlook for the Scottish economy and the Scottish budget.

Each year we also focus on a variety of longer term public finance questions. This year we focus on the options for reforming taxes and introducing new taxes, and discuss the differences in the funding of higher education between Scotland and England.Continue reading

The price of loyalty! (Differential Pricing – aka dual pricing – in Insurance and Other Markets)

Alex Dickson, Department of Economics, University of Strathclyde. Alex is a Senior Lecturer with research interests in Game Theory, Behavioural Economics and Industrial Economics

On Wednesday this week the Financial Conduct Authority (FCA) announced that it was launching a market study into the general insurance industry covering motor and home insurance, with a focus on insurance pricing practices. This follows its work focusing on pricing practices in the household insurance market. In addition, the Competition and Markets Authority (CMA) are in the early stages of an investigation into Loyalty Penalties following a super-complaint from Citizens Advice. What is going on here? Identifiable groups of consumers are being charged different prices for the same product or service for reasons that are not related to the cost to serve those consumers, leaving groups of consumers being exploited. A typical example is new vs existing customers, where existing customers pay substantially higher prices as their contracts are rolled over from year to year. The price of loyalty!Continue reading