Scotland’s economy outperforms UK in final three months of 2018

Scotland’s economy grew more than that of the UK in the final three months of 2018.

The latest GDP figures showed a rise of 0.3% in the period October to December – making this the eighth consecutive quarter of economic growth.

The rise was above the 0.2% recorded for the UK as a whole over the period, as the economy slowed.

And with official figures on Tuesday showing Scotland’s jobless rate at a record low of 3.4%, Finance Secretary Derek Mackay insisted the country’s economy “continues to go from strength to strength”.

But with the UK due to quit the European Union in little more than a week, he warned of the impact Brexit would have.

“The UK’s EU exit remains the biggest threat to our economic stability,” the finance secretary said.

“All forms of exit will cost jobs, make people poorer, damage our society and undermine the democratic decision of the people of Scotland to remain in the EU.”

He spoke out after GDP figures estimated that the Scottish economy had grown by 1.4% in 2018 compared to the previous year – the same as the UK as a whole.

In the final three months of 2018 growth in services – which makes up the bulk of Scotland’s economy – and construction sparked the overall rise in GDP, with theses sectors groWing by 0.5% and 0.8% respectively.

However the production sector shrank by 0.9% in October to December, with agriculture, forestry and fishing down by 1.1%.

Scottish secretary David Mundell said: “I am encouraged by today’s GDP figures which show Scotland’s economy continuing to grow.”

But the UK Government minister also said he was “concerned the Scottish economy has not shown the same growth as the UK as a whole over the past few years and it is important to close the gap”.

Mr Mundell hit out at the Scottish Government’s policy of increasing income tax for higher earners north of the border, arguing: “The Scotland Act 2016 gives the Scottish Government a range of new powers and I want to see them used effectively to boost productivity and strengthen the economy.

“By making Scotland the highest taxed part of the UK they risk damaging, rather than growing, our economy.”

Mr Mackay insisted: “Growing our economy and supporting businesses and jobs is a top priority for the Scottish Government.

“We have provided more than £5 billion of capital investment to grow and modernise Scotland’s infrastructure, and a wider package of support to businesses including maintaining a competitive business rates package and providing the most generous package of non-domestic rates reliefs anywhere in the UK.

“However, the UK’s EU exit remains the biggest threat to our economic stability.

“Our first priority is staying in the EU, in line with the overwhelming vote in Scotland to remain, and we support another referendum on EU membership.

“Short of that, the least damaging option is to remain in the Customs Union and European Single Market of 500 million people – eight times larger than the UK market alone.”