Reuters logo
Scottish economy lags behind rest of United Kingdom in 2016
April 5, 2017 / 2:39 PM / 8 months ago

Scottish economy lags behind rest of United Kingdom in 2016

LONDON, April 5 (Reuters) - Scotland’s economy slowed sharply last year, trailing the rest of the United Kingdom by the biggest margin in six years, official data showed on Wednesday, just days after Scottish leader Nicola Sturgeon called for a fresh independence vote.

Scots voted by 55 percent to 45 percent in 2014 to stay part of the United Kingdom, but Sturgeon said last week that there should be a new referendum within the next two years now that Britain plans to leave the European Union.

Most Scots opposed leaving the EU in June 2016’s Brexit vote, and on Wednesday Scotland’s government blamed negative sentiment after the referendum and a slowdown in the global oil industry for the recent hefty economic underperformance.

Economic growth in Scotland fell to 0.4 percent last year from 2.1 percent in 2015, the sharpest slowdown since 2009 and in marked contrast to the United Kingdom as a whole, where the economy grew by 1.8 percent.

The gap between UK and Scottish growth is now the widest since 2010.

“We have already seen significantly lower consumer confidence in Scotland since the vote last summer. Now we see that feeding through into our growth figures,” said the Scottish government’s finance secretary, Derek Mackay.

Growth in Scotland was weak even before June’s vote. The economy did not expand at all in the first three months of 2016, before seeing 0.1 percent growth in each of the next two quarters, before shrinking in the last three months of the year.

Mackay also highlighted the effect of a weaker oil industry. Wednesday’s data does not include North Sea oil revenue, but does include Scottish companies onshore that service the sector.

The Confederation of British Industry - a business lobby which forecast negative economic consequences from both Brexit and Scottish independence - said Scotland’s nationalist-led government should focus on tax reform and improving schools.

“Businesses are facing increased uncertainty and rising cost pressures, which has resulted in a number of recent closures and potential job cuts affecting hundreds of people across Scotland,” CBI official Hugh Aitken said.

“The Scottish Government should therefore prioritise ... improving education attainment and setting a competitive tax regime,” he added. (Reporting by David Milliken, editing by Andy Bruce)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below