This follows 0.0% growth in June 2023. In the three months to July, GDP is estimated to have contracted by 0.1% compared to the previous three month period.

Output in the services sector, which accounts for around three quarters of the economy, contracted by 0.4% in July. Output in the production sector is estimated to have grown by 2.8% in July, with the largest contribution to overall GDP growth being manufacturing.

Kevin Brown, savings specialist at Scottish Friendly, commented: “The Scottish economy is lagging the wider UK benchmark at the moment and by current estimate is still yet to exceed in 2019 level.

“The economy north of the border outperformed the UK overall in July with 0.1% growth versus a 0.5% dip in the whole UK – but over three months this trend is reverse with 0.3% growth vs a 0.1% fall in Scotland.

“Digging into the sectors it looks like services in Scotland are in significant retreat, down 0.4%, but this is offset somewhat by bumper 2.8% growth in manufacturing in July.”

Mr Brown continued: “It is a worry that there could be greater divergence between the two economies moving forward. Bringing down inflation has been the main priority up until now, but there is a question mark around whether Scotland’s economy is cooling faster than the rest of the UK, and potentially worse hit by higher interest rates.

“Rates look to be potentially at or near their peak, which is positive for households. But inflation still persists and the Scottish economy is bearing the brunt of both forces.

“The remainder of 2023 could be a crucial period for dictating the long-term outlook for the Scottish economy and the financial prospect of households up and down the country.”