Sturgeon’s ‘sinking dream’

a mandate for a hard Brexit, while she came under fire for her pursuit of independence my grew by 3.5 per cent. The report said a decline in North Sea activity with its “knock-on impact” on the onshore economy had hit the country. Professor Mclaren added political uncertainty had also affected the economy.

“This could have been negatively impacted upon in a Scottish context due to the uncertainty surrounding the independence referendum of 2014 and the potential for a second referendum to come,” the report said.

“Such uncertainty, for example over future currency and trading arrangements, can spill over into delayed or reduced investment and employment.”

Also mentioned was the Scottish Government’s decision to go for higher taxes than the rest of the UK.

“The evidence so far shows a move to a higher tax policy in Scotland versus the UK. The Snp-led Scottish Government has put in place a slightly higher income tax system along with support for, although not unilateral implementation of: a higher top rate of income tax; higher than planned corporation tax; a higher national minimum wage and higher public sector wages.

“While few of these higher tax intentions have come about, they do give an indication of the intended direction of travel… As such they may be interpreted by businesses and wealthy individuals as a risk to future income levels and impact on behaviour now in order to reduce future losses.”

Professor Mclaren said: “The oft repeated view of the Scottish Government that ‘the foundations of Scotland’s economy remain strong’ would appear to be disconnected from reality.”

Economy secretary Keith Brown said: “We remain one of the most prosperous parts of the UK, outside London. We do of course recognise the continuing challenges for the Scottish economy such as the downturn in the oil and gas sector and its impact on growth.”