Scotland and the latest Brexit modelling scenarios – a negative outcome all round

Over the course of this week, the UK Government, the Scottish Government and the Bank of England all published new Brexit analysis.

We have been asked by a number of people to give our take on these numbers.

So in this blog, we attempt to summarise what each model is telling us and the implications for Scotland.

In short, the numbers don’t look great. Far from it.

Even under the UK Government’s favoured deal, the UK economy is expected to be smaller in the long run by around 4%.

But it is the Bank of England’s scenario of a disorderly ‘no deal’ Brexit that is the most eye-watering. Here the UK economy could shrink by 8% in a year – double the size of Scotland’s recession during the financial crisis. Unemployment could rise to 7.5%. If that was replicated in Scotland this would be equivalent to around an additional 100,000 people out of work.Continue reading

November 30, 2018

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.

Continue reading

November 23, 2018

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

Today we published our latest Economic Commentary.

Alongside our analysis of the Scottish, UK and global economies, we include the following articles:

Today’s Commentary also includes an examination of the hot topic of regional inclusive growth.

In this blog, we summarise some of the key points from our latest outlook.

FAI GDP and unemployment forecastsContinue reading

September 26, 2018

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

Recent trends in business investment in Scotland: A Brexit effect?

Late last month, the latest business investment figures for Scotland were published – with a reported fall of 15% over the year.

Are these figures the result of Brexit uncertainty?

If the latest business surveys are believed then this is quite likely in some instances. But a look at the data from well before the EU Referendum reveals that low levels of investment have been a feature of the Scottish economy for years.

Brexit can’t be blamed for every structural challenge that we face.

Initiatives to boost the supply of finance are to be welcomed. But it’s not entirely clear that this is the greatest barrier. In many instances, it is the demand for finance that needs to be developed and supported.

Continue reading

February 19, 2018