Document Abstract

No deal Brexit: economic implications for Scotland

Analyses the potential impact that a no deal Brexit could have on the Scottish economy. Examines possible outcomes based on two scenarios: 1 - a short, sharp, supply disruption lasting a number of months, this shock is assumed to be primarily on the supply side, causing major disruption to the movement of goods and services; and 2 - assumes that the initial supply shock lasts longer, leading to a further fall in demand as a result of a sustained deterioration in consumer and business confidence, this in turn reduces activity across the economy and magnifies the size of the shock. Draws on the impacts of previous economic shocks and a modelling exercise. Assesses the potential impacts of a no deal Brexit on: trade disruption; business investment and access to finance; exchange rates and Sterling depreciation; international migration; inflation and interest rates; the labour market and unemployment; and the overall economic implications. Considers a number of potential outcomes and, in particular, their relative economic impact across different industries and geographies. Concludes that the combined pressures have the potential to push the Scottish economy into recession during 2019, and the sectors likely to see the greatest impact include agriculture and fishing, transport equipment, chemicals, pharmaceuticals, food and construction.

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Publication information

Author:
Office of the Chief Economic Adviser, Scottish Government
Year:
2019
Pages:
34
Ref No:
B52342
Source:
Scottish Government

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