Scotland's economy: weak pound boosts tourism and exports

The fall in the value of the pound is providing a 'welcome boost' for Scotland's tourism sector and exporters, said the Fraser of Allander Institute. Picture: Ian Georgeson

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The weakness of sterling in the aftermath of the Brexit vote saw Scottish exports rise for the first time in two years in the three months to June, a report out today reveals.

The weak pound also buoyed the country’s tourism sector, boosting visitor numbers, says the Royal Bank of Scotland Scottish Business Monitor, produced by the Fraser of Allander Institute.

However, on the downside, the report says capital investment continues to fall and is “likely to do so for the rest of the year”, suggesting business confidence overall remains fragile.

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Cost pressures, exacerbated by the weakness of sterling since the Brexit vote in June last year, also “remain strong, suggesting higher consumer price inflation to come”, the Scottish Business Monitor adds.

The survey of more than 400 businesses reveals that more than a quarter (27 per cent) of companies saw export activity rise in the three months to June.

That compared with less than one in five (18 per cent) who reported a fall. The balance of +9 per cent compares with a flat first quarter to the year and a balance of -16 per cent during the final quarter of 2016 – and 11 per cent in Q3 – making this the first positive news on Scottish exports in two years.