Brexit uncertainty hitting business in Scotland, finds PwC

Written by Liam Kirkaldy on 18 July 2017 in News

In a new report PwC found that although economic growth held up better than expected in the six months following Brexit vote, it slowed in the first half of 2017 as inflation rose sharply

Housing - image credit: Fotolia

Ongoing political and economic uncertainty caused by Brexit is hitting business in Scotland, according to a new report from PwC.

In a new report the business adviser found that although economic growth held up better than expected in the six months following the Brexit vote, it slowed in the first half of 2017 as inflation rose sharply.

PwC projected Scotland would see 1.2 per cent growth in 2017 and 1.1 per cent in 2018 - behind UK GDP growth of 1.5 per cent in 2017 and 1.4 per cent in 2018.


But while GDP increased in Scotland between 2016 and 2017, housing transactions felt the effects of Brexit uncertainty, with year-on-year transactions down for twelve consecutive months.

PwC reported businesses were being forced to make contingency plans for possible outcomes when the UK leaves the EU.

Consumer spending growth is expected to continue to be “moderate” in 2017-18 as inflation eats into real spending power and wage growth remains subdued despite record employment rates.

Meanwhile, with uncertainty continuing, PwC found four Scottish areas have experienced the highest price decline in house prices when compared to UK counterparts.

Lindsay Gardiner, regional chair for PwC in Scotland, said: “While some may see concern at the fact Scotland and Northern Ireland are at the bottom in terms of GDP improvement, there is actually very little separating most of the UK. This year the best growth we expect any region - except for London - will see is 1.5 per cent and it is 1.4 per cent next year.

“Where concerns should perhaps be focused is around wage growth as many are offsetting limited growth through increased borrowing - which may have a longer term impact via interest rate rises or employment downturn.

“It’s too early to speculate on how the Brexit talks are going to impact growth, however current exchange rates have some offsetting benefits for net exports.

“The main message we are discussing with businesses at the moment is to consider where Brexit may have an impact and to make contingency plans for a number of scenarios, particularly those who may face changes in customs tarrifs or employment challenges.”



Related Articles

Scottish Parliament committees question ambition of draft climate change plans
10 March 2017

Draft climate change plan sets out the Government’s emission reduction strategy over the next 15 years

EXCLUSIVE: RBS looks to EU banking licenses amid Brexit uncertainty
18 January 2017

RBS Scotland board chairman says its European banking licenses could afford the bank some flexibility after Brexit

Fergus Ewing urges UK government to "come clean" on plans for fisheries policy after Brexit
10 November 2017

First Minister Nicola Sturgeon claims the UK Government has not honoured promises to share information on the progress of Brexit negotiations

EU migrants to Scotland contribute £4.4bn in GDP each year
8 November 2017

Analysis submitted to the Migration Advisory Committee shows that each of the 128,000 EU nationals working in Scotland contribute an average of £34,400 to GDP every year

Related Sponsored Articles

Share this page