Scots economy to lag behind UK’s in 2015 – EY Item Club

Scottish economic growth will trail overall UK growth this year partly as a result of the depressed oil price, according to economic forecaster the EY Item Club.

The influential group’s latest summer update suggests that Scotland’s economy will grow by 2.2 per cent, a small half-year upgrade on an earlier forecast of 2 per cent.

But while the Scottish economy matched UK growth last year, the expectation for this year is that Scotland will fall behind by 0.5 per cent, a pattern that could linger into the medium term.

Dougie Adams, senior economic adviser to the EY Scottish Club, said: “The downside of the oil price fall is much more marked for Scotland than for the rest of the UK; the Scottish consumer appears to be pausing for breath and the high employment r ate could point to emerging capacity constraints.

“The pattern of GVA (gross value added) growth in Scotland trailing the UK is expected to persist over the next few years.”

The Scottish employment market provides grounds for optimism, however, with 25,000 jobs expected to be created in 2015, an increase of 0.9 per cent.

The public sector and manufacturing are set to reduce headcounts, while financial services tread water, but all other sectors are expected to increase employment.