It seemed that 2017 should have killed the campaign for Scottish independence stone dead.

At the UK general election in June, the pro-independence Scottish National Party (SNP) lost a third of its Westminster seats, forcing SNP leader Nicola Sturgeon to "reset" her plans for a second independence referendum. Then, in August, new analysis showed that an independent Scotland would face a projected budget deficit of 8.3 percent - the largest of any EU state. And on top of that, major splits have begun to emerge within the "Yes" base, as younger, more radical activists sympathetic to Jeremy Corbyn and the Labour Party have clashed with older, more conservative nationalists loyal to the SNP.

These setbacks have occurred after a decade of nearly uninterrupted progress for independence supporters. The SNP first took control of Holyrood, Scotland's devolved national parliament, in 2007. In 2011, it won an overall majority of the parliament's seats. In 2014, it staged (and narrowly failed to win) a landmark vote on the break-up of Britain. So the rapid loss of momentum that has taken place this year has been profoundly disconcerting for a movement that had come to view independence as a cast-iron certainty.

{articleGUID}

Supporters of the UK, of course, are delighted, and many of them are now convinced that the separatist tide has peaked. "IndyRef2 is dead," Ruth Davidson, the leader of a freshly revived Scottish Conservative Party, announced in the aftermath of June's vote. "Now it's time to get back to what matters to the people of Scotland - that's sorting out our schools, growing our economy and looking at our public services."

There is, however, one sizeable flaw in this analysis: Despite suffering a series of potentially terminal defeats, the Scottish "Yes" campaign remains in surprisingly good shape, and the appeal of independence is proving much more resilient than unionists seem willing to admit.

Scottish nationalism is alive and well

The baseline numbers tell their own story. A poll from September put backing for independence at 46 percent - one point higher than it was at the same stage in 2014. Other surveys suggest it might be slightly lower than that, but few indicate that it has fallen far below the symbolic 40-percent mark. Similarly, the SNP - which is now in its 11th year of office - continues to register double-digit leads over Labour and the Conservatives at both the devolved Scottish and UK parliamentary levels.

Until quite recently, polling of this sort would have been unthinkable for nationalists. Throughout the 1970s, 1980s, and 1990s, barely a quarter of the Scottish electorate wanted Scotland to leave the UK. Today, it's cited as evidence that the independence movement has stalled and that the SNP is spiralling into decline.

In reality, unionism faces a crisis of its own.

A toxic combination of austerity and Brexit has rendered Britain, once again, the veritable economic 'sick man of Europe', plagued by rising inflation, falling real-terms earnings, flatlining growth, and a political class that has absolutely no idea how to fix the mess it has created.

Since the 2014 referendum, the case against independence has rested almost exclusively on the claim that Britain insulates Scotland from economic pain. In the absence of English public subsidies, unionists argue, Scotland would be a financial basket case, incapable of covering the basic costs of self-government. Even Jeremy Corbyn - who otherwise vigorously insists that spending cuts are an ideological choice rather than a fiscal necessity - has suggested that independence would mean "turbo-charged austerity" for the Scots.

On paper, he might have a point. The prolonged slump in global oil prices has decimated Scotland's once lucrative North Sea oil industry, leaving a 13.3 billion British pound-shortfall ($17.6bn) in Scotland's annual finances. But until Scots actually vote for and enact independence, that shortfall remains hypothetical. What is definitely not hypothetical, on the other hand, is the increasingly dysfunctional state of the British economy.

The ruinous effects of Brexit

The charge sheet is devastating. According to the Resolution Foundation, a think-tank in London, British workers are currently suffering from the tightest squeeze on average wages since the 1800s (pdf), and that trend is set to continue well into the 2020s. At the same time, the Tories' scorched earth economic policy, reaffirmed by the UK Chancellor Philip Hammond in his Autumn budget last week, has pushed 30 percent of British families - 19 million people in total - towards or beneath the poverty line. Then there's the UK's chronic rates of low productivity, its consistently weak GDP growth, its runaway housing and rental costs, and its explosive levels of private debt. And that's before the ruinous economic effects of Brexit - which Scotland voted overwhelmingly against in 2016 - really start to bite.

For many Scots, this is what frames their experience of the Union. It's the tangible, material price they pay for membership of a country that is visibly failing across a range of key social and economic fronts. Millennials feel the weight of that failure more acutely than most, which is why they support independence in such vast numbers.

Challenges to the 'Yes' campaign

That's not to say the "Yes" campaign is suddenly free of political obstacles.

The election on November 18 of Richard Leonard, a left-wing trade unionist and Corbynite, as leader of the Scottish Labour Party represents a serious challenge to nationalism's monopoly of the social democratic centre-ground in Scottish politics. Like Corbyn, Leonard has set out a radical policy platform - including increased public investment and higher taxes on the rich - that has the capacity to cleave progressive voters away from the SNP.

{articleGUID}

And the ongoing controversy in Catalonia is more likely to shrink the prospects of Scottish independence than it is to advance them. The constitutional standoff between Barcelona and Madrid may have animated the SNP grassroots, and even prompted the party's instinctively cautious leadership to launch a rare intervention into the affairs of a foreign state. But it also illustrates the pitfalls of declaring independence unilaterally (London will resist giving the green light to another Scottish vote for as long as it can), as well as the EU's intense institutional hostility towards regional and sub-state secessionist movements.

Yet the underlying problem for unionism - that the promises of economic security and prosperity that helped keep Scotland inside the UK three years ago have already been comprehensively shattered - can't be ignored. A toxic combination of austerity and Brexit has rendered Britain, once again, the veritable economic "sick man of Europe", plagued by rising inflation, falling real-terms earnings, flatlining growth, and a political class that has absolutely no idea how to fix the mess it has created.

There's little reason to believe that the situation is going to improve, at least in the short term. Theresa May's government is paralysed: too weak to implement meaningful reform in the House of Commons and too scared to challenge Labour for a stronger parliamentary mandate at another general election. As a result, even after a gruelling 12 months - probably the worst in its recent history - Scottish nationalism still poses a very real and persistent threat to the UK. And that fact should terrify anyone hoping to safeguard the future of the Union.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.