Scotland is facing extra spending cuts of up to £1.3 billion when the Chancellor discloses next week how he will deal with the Brexit “growth shock”, an economic think tank has warned MSPs.

IPPR Scotland forecast that the Scottish Government’s budget will be cut by between £330 million and £1.34 billion per year by 2019/20 thanks to lower economic growth and tax receipts in the wake of the vote to leave the European Union.

In a submission to Holyrood’s finance committee, it said the final sum will depend on the balance Philip Hammond strikes between tax rises, borrowing and spending cuts in next week’s Autumn Statement.

When £2 billion of cuts that were planned before the Brexit vote are taken into account, the think tank said Scotland’s budget will cut by a total of between £2.33 billion and £3.34 billion by 2019/20 compared to 2015/16.

The economists warned that the prospect of further cuts make the reform of Scotland’s public services even more “imperative” as having “greater impact from fewer resources” may be a necessity for many years to come.

The analysis will bolster the Scottish Government claims that Brexit is harming the economy and public services. However, a series of business leaders have warned that the SNP’s threat of a second independence referendum is causing even greater damage.