Scotland business

Brexit uncertainty 'threat to investment'

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Brexit could reduce business investment in Scotland by £1bn by 2019, the Scottish government's chief economist has warned.

While Scotland's economy was expected to grow in 2018, the paper by Gary Gillespie highlighted a number of areas of concern.

He said uncertainty over Brexit could harm investment and result in unemployment increasing by 0.8% by 2019

Another impact could be reduced GDP growth, the report suggested.

Independent forecasts for the Scottish economy point to GDP growth of between 0.7% and 1.4% in 2018 - with the report noting these "remain below Scotland's long run trend rate of 2%".

It comes after the latest GDP figures showed Scotland's economy increased by 0.2% in the third quarter of 2017, with growth continuing "albeit at a lower rate" than the first half of the year.

But the report also highlighted the "more positive outlook for oil and gas", saying this could help drive productivity growth.

The assessment was published as the Scottish government's council of economic advisers met in Edinburgh.

Economy Secretary Keith Brown said: "The latest report further demonstrates the resilience of the Scottish economy during 2017 with encouraging signals of a slightly stronger outlook for the coming year.

"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, which continues to be supported by the pick-up in economic sentiment in the oil and gas 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 with 80% of the increase coming from full-time employment.

"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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