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Scottish economy will be 'negatively impacted by Brexit'

The housing market will also be affected from leaving the European Union.

Brexit: Scotland's economic growth has slowed.
Brexit: Scotland's economic growth has slowed. PA

Brexit uncertainty is having a negative impact on economic growth and the housing market, according to a new report.

The latest projections from PricewaterhouseCoopers (PwC) put Scottish growth at 1.2% this year and 1.1% in 2018, behind UK GDP growth of 1.5% and 1.4% respectively.

The economic outlook report attributes this to "slower consumer spending growth and the drag on business investment from ongoing political and economic uncertainty relating to the outcome of the Brexit negotiations".

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% and it is 1.4% 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."

https://stv.tv/news/politics/1393736-high-profile-scottish-figures-urge-for-halt-to-brexit/ | default

The same report found four Scottish areas have experienced the greatest decline in house prices when compared to UK counterparts.

Inverclyde has had a 19% drop in prices since 2007, East and North Ayrshire a 17% decline and West Dunbartonshire a fall of 13%.

Shetland is the only area of Scotland to have seen a considerable rise in property prices, with an increase of 59% placing it higher than some London areas.

PwC projects a slowdown in growth between now and 2020, with the average Scottish home to cost £160,000, up from £139,000 in 2016.

"Housing transactions, which tend to be more volatile than prices, are where the uncertainty caused by Brexit has manifested itself most strongly," PwC said.

"Year-on-year the number of transactions have been down for 12 consecutive months."

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