SCOTLAND’S leading economic think tank has called on the UK government to name the powers it intends to transfer to Holyrood after Brexit.
In its quarterly commentary on the nation’s economy, the Fraser of Allander Institute (FAI) said the greater clarity would help businesses plan for the change.
The FAI said Scotland’s economic health had “bounced back” in the first three months of 2017, but remained fragile after “an exceptionally weak” two years.
Record highs in employment and lows in unemployment were also welcome, but rising inflation continued to squeeze household budgets and consumer spending, it said.
The FAI’s Scottish growth forecast for 2018 was unchanged since June, at 1.4 per cent.
However, it revised its forecast for 2019 from 1.6 to 1.7 per cent.
FAI director Dr Graeme Roy said: “We believe Brexit has the potential to act as a long-term brake on Scotland’s growth potential and, to date, very little progress seems to have been made by the UK Government in its negotiations with the EU.
“One area the UK government could provide greater clarity on is over the specific powers they envisage being transferred to the Scottish Parliament post-Brexit. This would help enable preparatory discussions between business and the devolved administration.
“On balance our forecasts are based upon the assumption that a constructive deal between the UK and the EU is reached.”
John Macintosh, head of tax for Deloitte in Scotland, added: “The challenges created by political uncertainty can’t be underestimated and there is work to do if we are to realise the latent potential in the Scottish economy.”
A Scottish Government spokeswoman said: "Scotland's economy is fundamentally strong, but is being put at serious risk by the proposals to leave the world's biggest single market."
A UK Government spokesman said: "Scotland's economy is improving but still lags behind the UK as a whole. We want the Scottish Government to make full use of their powers to support the economy."
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