Snap election's economic impact on Inverness and wider Highlands unknown, says leading local economist
A SNAP election’s impact on the Highland economy will be difficult to predict, a leading Inverness economist believes.
But Tony Mackay, who runs Mackay Consultants, does not expect it to have a “noticeable impact” over the subsequent two to three years.
He was speaking after Prime Minister Theresa May caught the political world by surprise by announcing plans for a General Election in June.
The announcement came just weeks after Article 50 was triggered to signal the start of Brexit negotiations, and followed repeated insistence by Downing Street that Westminster would not go to the polls until 2020.
The Prime Minister argued that her u-turn was made reluctantly in the wake of opposition to Brexit from other parties.
But opposition MPs have accused her of political opportunism, and have questioned her claims after pointing out that the Prime Minister has yet to lose a single Westminster vote over Brexit despite her party’s slim majority in the Commons.
Mr Mackay believes the economic impact of the surprise vote on June 8 will be difficult to predict. He said: “Theresa May has made her reasons very clear and one of the main ones is to give her stronger control over the Brexit negotiations with the EU.
“If that helps to reduce the uncertainty, then there could be benefits for the UK economy, including the Highlands.
“If the PM gets a bigger majority, as the opinion polls predict, the value of the pound is likely to strengthen. That will reduce the inflation rate, by making imported food and other items cheaper.
“On the other hand, exports will become less competitive which will adversely affect local export businesses and also tourism.
“The PM’s attitude towards Brexit has clearly softened in recent weeks, so I think that a bigger majority for her will eventually reduce the negative impacts of the negotiations. She will be able to resist many of the demands of the hardliners, particularly on the rights of EU nationals to work here.
“Overall, I don’t expect the election to have a noticeable impact on the Highland economy over the next two to three years.”
