THIS week’s Scottish Budget, like the Chancellor’s Autumn Statement last month, is about one basic problem: trying to making do with much, much less. The Fraser of Allander Institute has already suggested this week that Scotland’s councils should brace themselves for cuts of £700million in the next few years, but that is only one part of the troubling state of an economy that only just managed to avoid recession last year and is now haunted by one word: Brexit.

The latest forecast from Fraser of Allander does contain the odd glimmer of hope – the expectations of growth have improved marginally from the summer, for example – but the continuing uncertainty after the EU referendum continues to cast a pall over the economy. Growth for next year is likely to be weak, at around 1.1 per cent. The Institute also offers little hope for the so-called JAMs (those who are “just about managing”): inflation will rise, wages will continue to stagnate, and economic growth in Scotland will be weak for the next few years.

The other problem is the Scottish economy also continues to lag behind the rest of the UK, mostly because of the ongoing crisis in the oil and gas sector. The Institute suggests that the outlook for the North Sea may be looking slightly better for 2017, but the devastating effects are still being felt in Aberdeen and beyond and, to make matters worse, the Chancellor failed to take the opportunity last month to help the sector through more tax relief, loan guarantees or increased support for decommissioning and exploration. Any kind of turnaround in oil and gas is still a long way off.

In the face of all this, the modest – some would say timid – measures expected from Finance Secretary Derek Mackay, which will probably include a small increase in income tax for higher earners, are unlikely to make much difference, and anything he does attempt will still have to happen against the backdrop of Brexit and the weight it has placed on the back of the economy. Scottish business simply does not have confidence in the Brexit process and only the UK Government can fix that by telling us what it intends to do.

The UK Government must also consider uniquely Scottish solutions to counter the effect the threat of Brexit is having on Scotland’s economy. Scots have been told repeatedly by the UK Government that there will be no bespoke deal, but there is already a precedent for a unique Scottish approach on immigration for example with the Fresh Talent initiative. Allowing Scotland greater freedom of movement of people would be one way to help an economy that is increasingly imbalanced by an ageing population.

However, the most pressing problem in the coming years is the uncertainty around Brexit, which has led directly to the pessimistic economic forecasts issued by the Fraser of Allander Institute this week. When he delivers his budget, Mr Mackay will no doubt do what he can with little room for manoeuvre but only Theresa May can tell us what Brexit means and shine some light and heat on a struggling economy. Until then, we are forced to stand and watch the Brexit debacle do its worst with the Scottish economy.