Time surely flies. It is Budget time again next week. In last November’s Autumn Statement (very much akin to a Budget but with the focus more on public expenditure than tax) Chancellor Osborne was able to act as the Giveaway Kid, thanks to some remarkably positive forecasts from the Office for Budget Responsibility (OBR).

This time around, I very much doubt that the OBR will be Mr O’s friend in the same manner. Indeed given that the global economy is now accepted by all key observers to have slowed, their forecast for both the UK economy and the public finances may be marked down significantly since their November efforts. Further fiscal tightening would be needed to achieve the same future path for those finances.

For most commentators – self included – this should be grounds for slowing the fiscal squeeze. For Chancellor Osborne that is, sadly, unlikely to be the case. In a BBC interview from China last month Osborne stated that: - “we may need to undertake further reductions in spending because this country can only afford what it can afford.”

This view was totally at odds with that of the International Monetary Fund, the OECD and even the Governor of the Bank of England. The IMF both urged G20 countries as a whole to boost infrastructure spend as global growth slowed and specifically called upon the UK to prepare to ease back on austerity measures in the event of further economic deceleration. The OECD echoed the IMF in asking its members (i.e. the rich countries of the world) to increase public expenditure. Meantime Governor Carney gave a similar, albeit more pointed, comment asking the G20 (including the UK of course) to develop “a coherent and urgent approach to supply-side policies.”

There are two key and fundamental points being made by these folk to which a responsible Chancellor should be paying attention. First we cannot rely upon loose monetary policy alone to extract us from the mire of slow and unbalanced growth; especially as the scope for further monetary easing is at or close to zilch. Second, we need to become more efficient on the supply-side of our economy if growth is to become stronger, more balanced and sustainable.

This supply side point is particularly pertinent for the UK – and Scotland. I have banged on in the past about a need for far more emphasis on means to enhance productivity in our economy; suggesting a short-term ‘Productivity Commission’ in Scotland. Some people tell me that business folk do not understand what productivity means and do not look to assess or enhance productivity as such in their organisations. Let me be as clear as I can be. Productivity is all about the efficiency of production of goods or services. How can you achieve more output for the same input of labour and equipment? Or how can you produce the same amount with fewer inputs? Higher productivity is a critical path to enhanced competitiveness and hence higher profits.

Until shortly before the great recession UK and Scottish productivity used to increase steadily year on year at about the same rate as our key competitors. No more. According to the economists at RBS, the latest data suggest that in 2014 output per hour in the UK was as much as 18 percentage points below the average for the other G7 economies – the big boys. Our rate of growth in productivity remains dismal, lagging behind all the G7 other than Italy. The Scottish story will be no better than that of the UK as a whole.

The recent economic data are clear. The UK trade deficit widened in 2015, in both goods and services, while UK industrial production declined by half a per cent between Q3 and Q4. This story of stagnant productivity, a widening trade gap and declining industrial production does not paint a pretty picture. As the communique from the G20 in Shanghai stated: -”monetary policy alone cannot lead to balanced growth”. UK interest rates are going nowhere for a good while yet but even a continuation of ultra-loose monetary policy cannot provide either more support to growth or encouragement to improved productivity. That is where there has to be a role for fiscal policy and the public finances.

To add to concerns about global deceleration and unbalanced/slowing UK growth we now have the added wrinkle of the Brexit referendum. Business and the economy need the uncertainties this brings like a hole in the head! That is especially the case in Scotland where the wrong vote could spark another referendum on independence and yet more uncertainty and angst. The UK needs to be a part of Europe. Business needs stable relations with our key market. A vote for exit would disrupt that relationship substantially and for an extended period. Far better if we were able to focus on re-balancing our economy, re-discovering our productivity skills and setting the economy in Scotland and the UK as a whole back on a sustainable path. A pragmatic and constructive Budget on March 16th would be a great start; but I am not holding my breath.

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