Scottish ministers face a hole of up to £1.3 billion in their finances because of Brexit, according to a think tank.
IPPR Scotland warns that the Scottish Government's budget will fall by between £330 million and £1.34 bn a year by 2019-20, because of slowed economic growth and lower tax receipts.
The warning comes as both the SNP and Labour urge the Chancellor Philip Hammond to ease up on austerity.
Today business leaders also call for tax breaks to encourage companies to grow and money for large-scale infrastructure projects to head off faltering confidence in the economy.
Simon Walker, director general of the Institute of Directors, said: “This is a moment for the Government to act decisively to make it easier for firms to expand and find more opportunities.
"We know that there isn’t a limitless source of funds, so we urge the Chancellor to make tax changes that incentivise investment, alongside targeted infrastructure investment.”
Reports suggest that Mr Hammond will plough ahead with billions of pounds worth of tax cuts for the middle classes, by raising the level at which workers start to pay income tax to £12,500.
In a speech today Labour's shadow chancellor John McDonnell will call for austerity to end, not simply be postponed.
He will also accuse the Chancellor of being “weak”and ignored by the Prime Minister.
The SNP have called on Mr Hammond to delay a planned £30-a-week cut to disability support.
Award-winning filmmaker Ken Loach and former Cabinet Minister John Redwood have also expressed concern about proposed cuts to the employment and support allowance.
The Scottish Government has also called for measures to boost investment in the North Sea.
Meanwhile, an analysis of HMRC figures by the TaxPayers' Alliance suggests that so-called ‘sin taxes’ have cost the Treasury more than £31 billion, money it says could be spent on struggling families, as a result of the black market in alcohol, tobacco and fuel.
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