The impact of Brexit uncertainty has cost the Scottish economy around £3 billion – relative to where it would have been – according to new research from the Fraser of Allander Institute.
In its latest Economic Commentary, supported by Deloitte, the University of Strathclyde-based research institute highlights how growth has remained sluggish over the past year with firms putting off investment as they await the outcome of the negotiations over the UK’s exit from the EU.
The Institute also points out that whilst it is possible that the UK’s exit from the EU will be finally ratified in the coming hours, days or weeks, this will not mark the end of the challenges facing Scottish businesses.
Professor Graeme Roy, Director of the Institute, said: “There are signs that Boris Johnson may be able to secure safe passage of his new deal with the EU, albeit perhaps not by the 31 October deadline, so that the UK will finally leave the EU three-and-half years from the Referendum.
“Securing a deal will help lift some of the fog of uncertainty that has hung over the Scottish economy in recent times. As a result, in the short-run, the economic outlook should improve. By avoiding a ‘no deal’ outcome, and all that would entail, growth is likely to move ahead of previous forecasts.
“However the nature of the ‘deal’, and in particular the intention to move to one of the ‘hardest’ forms of Brexit means that the long-term challenges for the Scottish and UK economies will be considerable.
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Graeme is Professor of Economics at the University of Glasgow, and formerly Director of the Fraser of Allander Institute
Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.
Adam is an economist at the FAI who works closely with FAI partners and specialises in business analysis. Adam's research typically involves an assessment of business strategies and policies on economic, societal and environmental impacts. Adam also leads the FAI's quarterly Scottish Business Monitor.
Find out more about Adam.
James is a Fellow at the Fraser of Allander Institute. He specialises in applied analysis of trade and climate change. His work includes the production of economic statistics to improve our understanding of the economy, economic modelling and analysis to enhance the use of these statistics for policymaking, data visualisation to communicate results impactfully, and economic policy to understand how data can be used to drive decisions in Government.
Ben is an economist at the Fraser of Allander Institute working across a number of projects areas. He has a Masters in Economics from the University of Edinburgh, and a degree in Economics from the University of Strathclyde, as well as experience working on a variety of projects for public, private, and third sector organisations. He also conducts work related to health, social care and criminal justice.