Wednesday, June 24, 2020

The Looming Scottish Recession

The Fraser of Allander Institute said the country was now in its deepest recession in living memory.
A report from the think tank said in the most optimistic scenario, it will be the end of 2021 before the economy recovers. In the worst case scenario it could be 2024 before a "new normal" is reached.
With more than 750,000 people in Scotland either furloughed or being supported through the UK government's self-employment scheme, the think tank fears a possible "raft of redundancies and business closures" will occur when this help starts to be scaled back. The institute's latest economic commentary said the immediate priority for many businesses is simply survival.
The number of Scots in receipt of the Universal Credit rose to more than 440,000 in May - more than double the total of 185,000 recorded in the same month last year. In addition, Scotland's unemployment rose by 30,000 to 127,000 between February and April as lockdown hit the labour market.
Prof Graeme Roy, director of the institute, said: "So far, as a result of the major government support initiatives that have been put in place the impact of the full effects of the crisis have been dampened. Sadly, it is only now once we start to switch the economy back on that the crisis will hit home with a raft of redundancies and business closures likely over the summer."
Steve Williams, senior partner for Scotland at accountancy firm Deloitte, said: "For the majority of organisations and consumers, the lockdown on non-essential parts of the global economy has left a scar on finances, with businesses and some individuals likely to emerge with a combination of higher debt and weaker financial reserves."

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