WHERE to even start? A month ago I wrote what it is now clear was a hopelessly optimistic column anticipating a vote for ‘stay’ in the referendum. This would have created much greater clarity as to the route ahead and hence an opportunity, at long last, to focus on economic policies in Scotland and how to achieve a return to high productivity growth based upon innovation, investment, best use of skills and strong management.

If only… Now we face uncertainty piled upon uncertainty. Over the next few months it is clear that these uncertainties will constrain investment across the UK and probably more in Scotland than elsewhere – because the uncertainties are even greater here.

Both the Governor of the Bank of England and the Chancellor of the Exchequer have specifically acknowledged that there will be a pause in investment – domestic as well as inward – and that this (along with a range of other factors) will result in economic growth being markedly slower than previously anticipated. And it is not as if a stellar performance was expected without this Brexit vote.

This could result in formal ‘recession’ in Scotland – defined as two consecutive quarters of negative growth. It will certainly mean a significant deceleration across the UK and the distinct probability of rising unemployment. Please be clear, this is not some unsubstantiated view of the effect of the UK leaving the EU. That impact is some while away. This immediate deceleration is the effect of the phenomenal uncertainties and the clear perception from all sides of a much higher risk environment, simply as a consequence of the Pandora’s box opened up by a vote to leave.

Both UK monetary and fiscal policies will change as a direct consequence of this relatively short-term effect, which could last for a year or two depending upon what transpires so far as negotiations are concerned. The UK public finances will deteriorate as tax revenues under-perform and some required public expenditures rise as (for example) unemployment tracks higher than previous forecasts. In response to these clear expectations – which even Brexiteers appear to fully accept – George Osborne has dropped his objective of reaching a zero deficit by 2020. His plan for the public finances, as developed since the 2011 general election, is totally shattered. He has referred to retaining credibility in fiscal policy but nobody now knows what that will mean.

On the monetary front Mr Carney was very sharply out of the blocks on post-Brexit Friday to stress that the Bank had funds in place to support the financial sector in its latest hour of need. He has subsequently stated very clearly his view that further monetary loosening will be required – very soon. Of course base rate has been stuck at 0.5 per cent for many years. So the scope for cutting interest rates is limited in the extreme, unless the Governor and the Monetary Policy Committee are prepared to take the immensely risky step of moving base rate into negative territory. Nobody knows how this would work through. The other option for monetary loosening would be more Quantitative Easing (QE), effectively more pumping money into the economy.

Some have suggested that this is a cavalier approach from the Governor, given that the sterling exchange rate has fallen sharply and that this will have the dual effect of raising inflation, as higher import prices feed through, and stimulating the economy, as the competitiveness of UK exports and import substitutes is enhanced. Monetary loosening runs the risk of further depressing sterling and stoking inflation. Would it really be necessary, alongside the Chancellor’s easing of the fiscal stance? The frank answer as so often in the past ten days is we do not know; but being risk averse to the threat of recession as we prepare for the incredibly hazardous task of exiting the EU sounds sensible to me.

These then are the immediate concerns related simply to much enhanced uncertainties. This is the aperitif for a main course composed of impacts of a wide variety of types as the UK leaves the EU. For Scotland the menu may be as per the rest of the UK – if we stay part of that grouping – or may be something entirely different if we leave the UK and endeavour to remain in or re-enter the EU.

In either of these scenarios Scotland’s relationship with her overwhelmingly most important trading partner (the UK) will be changed dramatically. If the First Minister can achieve the miraculous and negotiate agreement that Scotland stays in the EU as the rest of the UK exits, then perhaps we can retain sterling – formally or informally. If we have to re-apply, then the UK opt-outs will no longer apply, and Scotland will presumably be required to commit to aiming at euro entry, with all that implies for rigidity on fiscal policies and achieving a constrained and stable fiscal balance. The path to entering the euro zone could make Mr Osborne’s regime over the past six or seven years appear like ‘austerity ultra-light’. And an economic future for Scotland with a different currency from her key trading (and let’s face it) economic partner takes uncertainties to a new all-time high.

There is no easy route from this uncomfortable position. The short term will be tough; further out will be tougher and even more uncertain. That is the result of the Brexit vote. I still find that so difficult to believe and hope that like Bobby Ewing I shall wake up one day and discover it was all a dreadful dream. If only …

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