Scots economy already facing Brexit hit

● Bank chief warns departure from the EU could bring on another recession

Business leaders in Scotland have warned the country’s economy is already suffering a damaging Brexit-effect after Royal Bank of Scotland boss Ross Mcewan said EU departure could trigger another recession.

The chief executive of the partly taxpayer-owned RBS has said a no-deal Brexit could plunge the UK economy into downturn.

He warned that any dip in growth would affect the Edinburgh-based banking giant’s profits and share price.

The UK government still owns 62.4 per cent of RBS after the 2008 bailout and subsequent disposals. Mr Mcewan told the BBC yesterday: “We are assuming 1-1.5 per cent growth for next year but if we get a bad Brexit then that could be zero or negative and that would affect our profitability and our share price.”

He added that the bank was becoming more cautious with its lending to certain sectors of the economy – particularly retail and construction – and large companies were delaying investment decisions.

He said: “Big businesses are pausing, they are saying that in six months’ time I’ll have another look at the UK and I might come back, but if it’s really bad I’ll invest elsewhere – that’s the reality of where we are today.”

His comments prompted a stinging comment from Liz Cameron, chief executive and director of Scottish Chambers of Commerce over the UK government’s handling of the Brexit process.

“For months, we have been dismayed by the direction and tone of politics and the lack of leadership in addressing the concerns of business, quickly,” she said.

“As Mr Mcewan highlights, the continued uncertainty around Brexit has begun to impact on investment decisions – especially those made by larger businesses.

“Ultimately, we need to do all we can to mitigate any disruption to the economy, whether it’s Brexit or domestic policies. Listening to and acting on the views of business must continue to form a core part of designing and devising government policy.

“The UK government must work with EU partners to come to pragmatic arrangements in the coming months. A stable transition period, and rapid certainty over the degree of future regulatory and customs alignment, are key to ensure that businesses are adequately prepared for our new trading arrangements as the UK leaves the European Union.”

Liberal Democrat Christine Edinburgh West MP Jardine, whose constituency contains the RBS headquarters at Gogarburn, called on Theresa May to heed the Brexit warnings.

“The Prime Minister is too concerned with her own party and not enough with the country,” Ms Jardine said.

“It’s time for a People’s Vote with the opportunity to exit from Brexit.”

SNP MSP Tom Arthur added:“thisisjustthelatestwarning that a No Deal Brexit could have a devastating impact, hitting jobs, investment and living standards.

“It’s time for the Tories to get a grip of these negotiations and back our continued membership of the single market.” 0 Ross Mcewan has warned of zero or negative growth