World Economy

Brexit Uncertainty Could Cost Scotland 21,000 Jobs

Brexit may cut investment by £1 billion by next year.Brexit may cut investment by £1 billion by next year.

More than 21,000 Scots could lose their jobs by next year due to the ongoing financial uncertainty caused by Brexit, the nation’s chief economist has warned.

In a report on the state of the economy, Gary Gillespie says the UK’s forthcoming departure from the EU could also cost Scotland £1 billion ($1.39 billion) of business investment by 2019, iNews reported.

Another impact could be reduced GDP growth over this year and next, equivalent to every household in the country losing £200, his report states.

The grim forecasts in the ‘State of the Economy Report’ come days after the Scottish government predicted that a no-deal Brexit would leave the nation’s economy £12.7 billion a year worse off by 2030.

Gillespie also warns that “negative consumer confidence” in the run up to Brexit would create “another layer of uncertainty which could potentially further weaken the economy”. In a special section on the EU vote, it predicts that uncertainty could increase unemployment in Scotland by around 0.8% by 2019, the equivalent of 21,000 jobs.

The independent Fraser of Allander Institute had previously forecast that up to 80,000 Scots could lose their jobs within 10 years if the UK government takes Britain out of the EU single market.

In its report, the Scottish government said 8.5% could be wiped off Scotland’s GDP by 2030 if no deal was reached with the EU. However, the Scottish Conservatives dismissed the forecasts, saying they were “completely over-the-top” and accusing the government of “scaremongering”.

Gillespie’s report also says 2018 will be a “pivotal year for the Scottish economy”, arguing it remained “resilient” in the second half of last year despite “challenging” conditions. Weak real wage growth and falling confidence among consumers are possible economic risks in the coming year, it adds, but also highlights a “more positive outlook for oil and gas”.

Economy Secretary Keith Brown said: “While growth has been more modest than we would have liked, we’ve seen growth in the services sector and a welcome return to growth in the production sector.

“Scotland’s unemployment rate is lower than the UK, remaining below last year’s figure and close to record lows while the number of people in employment has risen by 59,000 over the past year.

“However, the report also notes that Brexit remains the biggest uncertainty hampering further growth, and I would once again call on the UK government to give people and businesses greater certainty on the Brexit process.”

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