Scots economy to flounder after Brexit

Scotland's economic growth is set to plummet next year as a result of the Brexit vote, a new report warns today.

Scotland's economic growth is forecast to fall next year. Picture: John Devlin

The country is already experiencing a “difficult” period as a result of the recession in the oil and gas industry which has seen thousands of North Sea workers lose their jobs, according to the study by MacKay Consultants.

Scotland’s gross domestic product (GDP) in Scotland fell from 2.5% in 2014 to 2.0% last year.

Today’s report warns this will fall to 1.6% this year, before edging up slightly to 1.8% next year.

Author Tony Mackay writes: “There are two main reasons for the low forecasts for 2016 and 2017: firstly, the ongoing recession in the North Sea oil and gas industry; and secondly, the uncertainty caused by the Vote Leave result in the EU Referendum.”

The problems in the oil industry has come about following the collapse in world oil prices from $115 a barrel in 2014 to about $50.

Professor MacKay adds: “That has had a serious negative impact not only on the Aberdeen economy but also the supply chain elsewhere in the country. In addition, some other industries have been struggling, notably in the public sector because of the ongoing cuts in public expenditure.”

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