WE may now have entered the month of Christmas but, remarkably, there is still plenty of activity - and uncertainty - on the economic front. There are recent data and developments to reflect upon, along with the expectation of a very tough Scottish Budget next week, immediately followed by the final meeting for 2016 of the Bank of England’s Monetary Policy Committee. What signals will the MPC emit about future interest rate trends?

One recent development of note has been the - not over dramatic - increase in the oil price, as a result of the OPEC nations at last agreeing to reduce production quotas.

For Scotland this price increase could have two repercussions. First it just might provide some mild support for our beleaguered oil and gas sector. Second it will add a further ratchet to consumer inflation.

Unfortunately the first of these effects is expected to be very limited; any marked recovery in the North Sea sector would require a price per barrel back up close to $100 rather than hovering around or below the $50 level.

The impact on inflation is, for two reasons, a cause for concern across the UK. There is the potential impact on monetary policy – interest rates. Inflation was already expected to be above the MPC’s target during 2017. This oil price hike will take it higher still, but we can hope (and indeed expect) that the MPC will close its eyes to even a marginally higher overshoot, given the slowdown in the economy expected next year.

More worrying is the impact on consumers, with the increase in real average earnings next year already projected to be modest or negative. If oil prices stay higher, then the squeeze on consumption will be even greater and the overall slowdown in GDP even more marked.

Turning to recent economic data, the outturn for UK GDP for Q3 2016 now looks likely to be distinctly better than many (self included) had anticipated in the wake of the Brexit referendum. Indeed the UK looks set to be the fastest growing economy among the G7 in 2016.

Nevertheless, looking forward, HM Treasury and the Chancellor continue to emphasise the need for the UK economy to be resilient in the face of first uncertainties and then real risks as Brexit becomes reality.

As set out in the Autumn Statement the first negative effect of that vote has been and will be on business investment. But during 2017 the impact of sterling’s sharp depreciation (down 20% er cent in trade weighted terms since last year) will feed through to prices and, as already mentioned, inflation will rise above target.

Nominal wage growth is unlikely to increase markedly, meaning that for many across the UK purchasing power will stagnate or decline.It seems inevitable that this impact will be felt most by those at the lower end of the income distribution, including those we must now call the JAMs – those ‘Just About Managing’.

The Chancellor devoted a great deal of his attention at the Autumn Statement to productivity – a subject I have banged on about frequently in this column.

I totally agree that great emphasis is required in economic policy on means of enhancing the UK’s productivity – and indeed Scotland’s where the situation is no better than at the UK level. There was a very neat description in the Statement of what a 20 per cent productivity gap with the USA and Germany actually means. It takes five days for the UK workforce to produce what is produced in these other nations in four days. That lower productivity has to have an adverse impact on pay and output.

This is not a specific Brexit issue. UK productivity has been in distress since the 2008 crash. Because of lower than previous productivity increases UK potential output is now some 17 per cent lower than was anticipated pre-crisis.

The great majority of this gap has nothing to do with anticipated Brexit effects. And there is clearly no simple or short term solution. Increasing productivity is not a short term solution to the Brexit concerns; it is much more of a long term requirement for stability and growth for the decades ahead.

In search of enhanced productivity, Chancellor Hammond announced in his Autumn Statement substantial additional funds for infrastructure and also for research and development (R&D) activity. There will be positive Barnett consequentials for Scotland from the former. I very much hope that at next week’s Scottish Budget these extra resources will be allocated to tackling our infrastructure deficiencies. The R&D funds are UK-wide and I firmly expect Scottish universities to seek and gain a disproportionate share, to our longer-term benefit.

This is all good stuff. But the impact of such attempts to enhance productivity is subject to what economists call ‘long and variable lags’. That means we can have a decent stab at the direction of impact (productivity should improve) but no real idea as to when that effect will materialise or how substantial it will be.

Available evidence suggests that there are a range of other factors constraining Scottish productivity growth, including a lack of outward-looking ambition among too many Scottish companies, constraints on both the demand for and supply of risk capital for innovative investment and some continuing skill shortages.

More and better infrastructure will, over time, help. More R&D raises the potential for more innovation. But the desire and drive have to be there from all involved.

Jeremy Peat is visiting professor at the University of Strathclyde International Public Policy Institute.