No growth in Scottish economy in 2010

Gloomy news from a recent analysis by Strathclyde University which said that Scotland would recover more from recession more weakly than the rest of the UK, with almost no growth during 2010. Unemployment could peak next year at 234,000.

Reasons for the slow return to growth include:

• Scotland's reliance on a large public sector in comparison to the rest of the UK. This means there is a smaller private sector base from which to grow as well as the impending squeeze on public spending.
• The service sector - financial services, property and business services - had also performed poorly in recent months.
• Lack of size and capability in the manufacturing sector to take advantage of low exchange rate and increasing global demand.
• Scots being more likely to save than others in Britain, which would slow growth.

The poor figures has increased the possibility that the recession in Scotland will last longer than it does across the rest of the UK.