Kevin Brown

Monthly statistics also show that GDP is estimated to have contracted by 0.6% in September, with decreases across the construction and production sectors.

Change in gross domestic product (GDP) is the main indicator of economic growth. Over the year, compared to the third quarter of 2021, the economy has grown by 2.9%.

During the third quarter output in the construction sector fell by 0.3%, output in production contracted by 1.0%, and output in the Services sector remained unchanged (0.0% growth).

The second estimate of GDP for the third quarter of 2022 will be available in Quarterly National Accounts Scotland, to be published on 1 February 2023.

Kevin Brown, savings specialist at Scottish Friendly, commented: “It is worrying that economic growth has now gone into full reverse in Scotland, returning the economy to below pre-pandemic levels, just at a time when Scottish households are struggling to keep on top of their outgoings. A fall of 0.6% will send a chill through the economy at a time when conditions are just getting worse.

“These figures are for September too, right before the calamity of fiscal policy changes made in Westminster at the end of that month set off so much trouble and caused a variety of economic problems in its wake.

“While inflation remains high, these GDP figures could be starting to show the economy coming off the boil as interest rates bite down. Employment and hiring could begin to slow and redundancies could soon rise. While this would work to bring inflation back into a better range, it is just going to be more pain for households under pressure.

“So, what can Scottish households do with such a difficult outlook? It may seem hard, if not impossible for many, but continuing to build up financial resiliency wherever possible could be the best way to limit the damage of any future financial shocks. Making even small savings can potentially lead to growth over the long term even whilst interest rates remain relatively low.”