Scottish economy to see 2-11 billion pounds Brexit hit, government says

Scotland's First Minister Nicola Sturgeon speaks at the public Question and Answer event with EU nationals living in Scotland, at the Corn Exchange, Leaving the European Union will sap Scotland’s economy by between 1.7 and 11.2 billion pounds ($14.76 billion) by 2030, depending on which new trade relationship Britain chooses, the Scottish government said on Tuesday.Presenting the figures, Scotland’s First Minister Nicola Sturgeon said she was seeking “in good faith” to negotiate the Scottish chapter of the terms under which Britain leaves the EU, but would keep Scottish independence from the UK as an option.“The old argument that the UK somehow delivers financial security for Scotland no longer holds water,” she told a news conference.The economic estimates were based on studies by think-tanks and Britain’s finance ministry, looking at the different trade agreements Britain might select after its vote to leave the EU, as well as the uncertainty facing the economy until its choice is clear.“Pursuing an option short of full EU membership risks damaging Scottish exports, makes the country a less attractive location for overseas investors and reduces future economic growth and prosperity,” the Scottish government said.Sturgeon has vowed to seek ways to keep Scotland’s EU membership, even though Britain as a whole voted to leave the EU two months ago. Scotland – one of the four constituent nations of the United Kingdom – voted to remain by 62 to 38 percent.The Scottish government summarised the potential impact on the economy of Britain’s different trade options: joining the European Economic Area, seeking a Free Trade Agreement or a World Trade Organisation membership, as estimated by different thinktanks.Researchers from the University of Strathclyde’s Fraser of Allander Institute have revised down their forecasts for Scottish gross domestic product growth in 2017 to 0.5 percent from 1.9 percent after the referendum result, factoring in economic uncertainty and depleted consumer confidence.Scotland’s exports to the EU were almost 12 billion pounds in 2014, or 42 percent of all the goods it sends abroad.The first official data covering the post-referendum period showed no immediate big hit to Britain’s economy as retail sales surged in July and claims for unemployment benefits fell.But economists expect rising inflation from a weak pound and worsening business confidence in the coming months.Sturgeon is not ruling out another Scottish independence referendum as part of its efforts to keep Scotland in the EU, although independence was not mentioned in its summary of the risks to the Scottish economy of the EU vote.The timing of a new independence vote, however, would hinge on when the UK’s Brexit position becomes clear, she told reporters.Scotland voted to stay part of the UK by 55 to 45 in 2014.(Reporting By Elisabeth O’Leary, editing by Stephen Addison)

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