UK crisis: Scots suffer from declining British economy

scotland-money.jpg
Scottish economy remains comparitively sluggish as Olympics
'bounce' benefits London

UK crisis: Scots suffer from declining British economy

The UK’s economic crisis which has seen desperate money creation measures being taken by the Bank of England continues to hit Scottish businesses and families hard.

The Fraser of Allander Institute at Strathclyde University has announced that Scotland’s expected growth by the end of 2012 will be a negative 0.1 percent, compared to forecast growth of +0.4 percent in June.

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Referencing the “Olympic bounce” which has seen an enormous subsidy benefiting London, the think-tank argues that the relatively poor Scottish figures may well be attributed to receiving no benefit from the Olympic bonanza.

It said: “The strong jobs growth of 0.72 per cent in UK employment in the quarter, compared to a fall of 0.06 per cent in Scottish jobs, might be largely the result of a strong output differential due to the Olympics.”

The institute has revised its growth forecast for Scotland in 2013 down 1.3 percent from 1.6 percent, although this is expected to be higher than growth figures for the UK as a whole.

UK stagnating

Yet, a ‘silver lining’ is to be had:

The Commentary shows that since the recession began four years ago labour demand has fallen by much less in the UK than output, suggesting a marked fall in productivity. In Scotland, in contrast, labour demand appears to have fallen by more than output over the period.”

“While this is bad news for unemployment, higher productivity may be good news for future Scottish growth.”

Paul Brewer, a senior partner at PwC in Edinburgh, stated:

“While the overall picture is one of stagnation, the Scottish Government has been using the levers available to it to stimulate growth. If the focus on infrastructure spending, such as the new Forth Crossing, can strengthen through 2013 and beyond the outlook for construction will be more positive.

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published this page in News 2012-11-08 13:59:30 +0000