Grow th slows but recession is kept at bay

SCOTLAND’S economy has narrowly avoided slipping into recession, though growth trailed the rest of the UK over the past year.

Figures released yesterday showed Scotland’s economy grew by only 0.8 per cent in the first three months of the year.

A second consecutive quarter of shrinking output would have officially signalled the onset of a recession. However, economists warned the outlook remained ‘poor’.

The statistics also showed Scotland still has some catching up to match the rest of the UK, with the economy expanding at a third of the rate seen elsewhere in Britain.

Scottish Secretary David Mundell said: ‘These are very encouraging figures. The Scottish economy is returning to growth and I am pleased to see that the manufacturing sector in particular is making the most of export opportunities.

‘But, over the year, Scotland has continued to lag behind the UK as a whole, so there is still a lot of work.

‘The Scottish Government has extensive powers to grow the economy and these figures underline the need for our two governments to work together as we prepare to leave the EU.’

Scotland’s 0.8 per cent growth in gross domestic product compared to 0.2 per cent across the UK. But over the past year, our economy has grown by 0.7 per cent, compared with 2 per cent in the rest of the UK.

Economy Secretary Keith Brown said: ‘Today’s figures reinforce the fact the fundamentals are strong. Output is now 6 per cent above the [2008] pre-recession level and unemployment is at its lowest.’

But business leaders urged a rethink on tax rises in Scotland.

Scottish Chambers of Commerce chief executive Liz Cameron said: ‘We must ensure that we are seen to be the best place in the UK to do business and that will require a fundamental reassessment of tax policies.’