Brexit: the mood amongst Scottish businesses

The last month has been a tumultuous time in the Brexit negotiations following the publication of the Prime Minister’s Chequers plan and the subsequent resignation of senior UK Ministers.

To help understand how businesses in Scotland are viewing recent developments, over the course of July we have been speaking to around 350 businesses from across the country (and from a variety of different sectors).

The focus of the survey was not on whether or not businesses believe Brexit to be good or bad, but instead, how their preparatory plans were taking shape.

This blog summarises the results of our survey – with a full run down of the results to be published in next month’s Economic Commentary which we’ll be publishing in partnership with Deloitte.Continue reading

August 6, 2018

The spillover effects of UK trade-enhancing industrial policies on the energy and non-energy systems

Key messages

  • The “spillover” effects of non-energy (primarily economic) policies on the energy system are of considerable interest from a policy perspective. In (The spillover effects of UK trade-enhancing industrial policies on the energy and non-energy systems) we analyse the impacts of export promotion policies – a key element of the UK’s Industrial Strategy – on the energy system and energy policy goals.
  • As the impacts of such policies are, in a large part transmitted via their effects on the economy, we adopt a computable general equilibrium model of the UK (UK-ENVI) that fully captures the interdependence of the energy and economic systems.
  • Our simulation results suggest that an across-the-board stimulus to exports stimulates all major economic indicators, and increases total energy use significantly. The energy intensity of GDP increases – not directly through energy exports – but indirectly through the energy sectors’ linkages to other sectors.
  • Export led growth therefore impacts on energy use – and significantly so. This in turn is likely to have an adverse impact on emission targets.
  • Policy makers should be aware of the fact that a successful implementation of the Industrial Strategy may create significant tensions with the UK’s Clean Growth Strategy, for example, and with the goals of energy policy more generally, in the absence of offsetting policy initiatives.
  • Ultimately, a knowledge of such spillover effects of economic policies on the energy system creates the potential for more effective and efficient policy making.

Continue reading

August 2, 2018

EY: Attractiveness Survey 2018: “Another strong year, but with precious little room for complacency”

Duncan Whitehead is the EY Lead for Economic Advisory in Scotland – DWhitehead2@uk.ey.com.

He is also a visiting researcher at the Fraser of Allander Institute.  

The views expressed in this blog are those of Duncan. The blog summarises the latest findings from the EY Scotland Attractiveness Survey 2018 report.


Scotland continues to build on its recent strong FDI performance…

The latest findings from EY’s FDI attractiveness programme shows that Scotland recorded a 7% increase in the number of FDI projects secured, rising from 108 in 2016 to a 10-year high of 116. This means the number of inward investment projects in Scotland has reached new records in each of past three years.

Continue reading

June 11, 2018

The economic impact of changes in alcohol consumption in the UK

2018 is set to be a significant year for the UK alcohol industry as, after a prolonged legal battle, the Scottish Government has imposed a minimum unit price for alcohol of 50p per unit. Beyond Scotland, the policy has sparked debate on UK-wide policy with calls to develop a new UK alcohol strategy focused on reducing harmful consumption.

The purpose of this blog is to summarise the results from a recent research project on the potential macroeconomic impact of changes in UK alcohol consumption. Previous studies have tended to focus on the impact of a reduction in consumption on alcohol in isolation. However, it is likely that a shift in tastes away from alcohol – either through policy or change in consumption patterns – would result in an increase in spending on other goods and services. The full report presents a wide range of the modelled scenarios to look at this ‘net’ effect. Here we summarise just a few of them.

Continue reading

May 31, 2018

Gross national income statistics for Scotland: a net outflow of Scottish income?

Last week, the Scottish Government published experimental statistics on Scottish Gross National Income (GNI).

This is the latest in the round of developments to widen the coverage of economic statistics in Scotland. The commitment of the Scottish Government to improving the databank of Scottish economic statistics is to be commended. In recent years, this has seen the development of national accounts, a significant improvement in the coverage of GERS, a bringing forward of the publication of GDP and new statistics on Scottish productivity.

Continue reading

May 7, 2018