Forecasts of the Scottish economy [November 2011]

Research output: Contribution to journalArticle

Abstract

In summary, we revise down our forecast for Scottish GVA growth in 2011 from 0.8% to 0.4%. This is due to rapidly falling household consumption indices, suggesting (for the UK, and by implication Scotland) a rapid falling off in consumer confidence since the summer months and a worsening global (particularly Euro zone) economic environment which has seen unprecedented declines in business activity and confidence during the second half of 2011. Continued high inflation, driven by commodity and energy price increases and temporary factors from recent changes to the VAT regime, will squeeze household incomes. Incomes themselves are seeing slower growth as inflation expectations remain anchored in the medium term, meaning real reductions in household income. Indeed the Bank of England warn against downside risks to meeting their 2% inflation target over the medium term as persisting weak domestic and external demand. Indicators suggest that 2012 will be a more difficult trading year, and our forecast has been revised down from 1.5% to 0.9%.
LanguageEnglish
Pages22-33
Number of pages11
JournalFraser of Allander Economic Commentary
Volume35
Issue number2
Publication statusPublished - Nov 2011

Fingerprint

Household income
Consumer confidence
Euro zone
Economic environment
Inflation expectations
Commodity prices
Household consumption
Business activity
Income
Factors
High inflation
Confidence
Downside risk
Bank of England
Energy prices
Scotland
Inflation target

Keywords

  • Scottish economy
  • Scottish economic performance
  • economic forecasts
  • GDP performance

Cite this

@article{5d6eedb1f183476fbcbb8e15ac3ccb20,
title = "Forecasts of the Scottish economy [November 2011]",
abstract = "In summary, we revise down our forecast for Scottish GVA growth in 2011 from 0.8{\%} to 0.4{\%}. This is due to rapidly falling household consumption indices, suggesting (for the UK, and by implication Scotland) a rapid falling off in consumer confidence since the summer months and a worsening global (particularly Euro zone) economic environment which has seen unprecedented declines in business activity and confidence during the second half of 2011. Continued high inflation, driven by commodity and energy price increases and temporary factors from recent changes to the VAT regime, will squeeze household incomes. Incomes themselves are seeing slower growth as inflation expectations remain anchored in the medium term, meaning real reductions in household income. Indeed the Bank of England warn against downside risks to meeting their 2{\%} inflation target over the medium term as persisting weak domestic and external demand. Indicators suggest that 2012 will be a more difficult trading year, and our forecast has been revised down from 1.5{\%} to 0.9{\%}.",
keywords = "Scottish economy, Scottish economic performance, economic forecasts, GDP performance",
author = "Grant Allan",
year = "2011",
month = "11",
language = "English",
volume = "35",
pages = "22--33",
journal = "Fraser of Allander Economic Commentary",
issn = "2046-5378",
publisher = "University of Strathclyde",
number = "2",

}

Forecasts of the Scottish economy [November 2011]. / Allan, Grant.

In: Fraser of Allander Economic Commentary, Vol. 35, No. 2, 11.2011, p. 22-33.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Forecasts of the Scottish economy [November 2011]

AU - Allan, Grant

PY - 2011/11

Y1 - 2011/11

N2 - In summary, we revise down our forecast for Scottish GVA growth in 2011 from 0.8% to 0.4%. This is due to rapidly falling household consumption indices, suggesting (for the UK, and by implication Scotland) a rapid falling off in consumer confidence since the summer months and a worsening global (particularly Euro zone) economic environment which has seen unprecedented declines in business activity and confidence during the second half of 2011. Continued high inflation, driven by commodity and energy price increases and temporary factors from recent changes to the VAT regime, will squeeze household incomes. Incomes themselves are seeing slower growth as inflation expectations remain anchored in the medium term, meaning real reductions in household income. Indeed the Bank of England warn against downside risks to meeting their 2% inflation target over the medium term as persisting weak domestic and external demand. Indicators suggest that 2012 will be a more difficult trading year, and our forecast has been revised down from 1.5% to 0.9%.

AB - In summary, we revise down our forecast for Scottish GVA growth in 2011 from 0.8% to 0.4%. This is due to rapidly falling household consumption indices, suggesting (for the UK, and by implication Scotland) a rapid falling off in consumer confidence since the summer months and a worsening global (particularly Euro zone) economic environment which has seen unprecedented declines in business activity and confidence during the second half of 2011. Continued high inflation, driven by commodity and energy price increases and temporary factors from recent changes to the VAT regime, will squeeze household incomes. Incomes themselves are seeing slower growth as inflation expectations remain anchored in the medium term, meaning real reductions in household income. Indeed the Bank of England warn against downside risks to meeting their 2% inflation target over the medium term as persisting weak domestic and external demand. Indicators suggest that 2012 will be a more difficult trading year, and our forecast has been revised down from 1.5% to 0.9%.

KW - Scottish economy

KW - Scottish economic performance

KW - economic forecasts

KW - GDP performance

UR - http://www.strath.ac.uk/fraser/

UR - http://www.strath.ac.uk/frasercommentary/

M3 - Article

VL - 35

SP - 22

EP - 33

JO - Fraser of Allander Economic Commentary

T2 - Fraser of Allander Economic Commentary

JF - Fraser of Allander Economic Commentary

SN - 2046-5378

IS - 2

ER -