Scottish unemployment total predicted to hit 250,000

Published on Thursday 14 May 2009 16:28

Unemployment will hit a quarter of a million in Scotland, a leading business figure today warned.

And Government measures to tackle the "deteriorating" state of public finances are not good enough, CBI Scotland chief executive Iain McMillan said.

The economy is in "deep trouble", he told the Tory spring conference in Perth, with the CBI predicting it will shrink by 3.9% this year – the worst since the 1980s and "possibly" since the war.

"We expect unemployment in the United Kingdom to reach 3.2 million out of work," Mr Mcmillan said.

"That translates into Scotland, sadly, as over a quarter of a million people being out of work."

The UK will continue in recession for the whole of 2009, while the economy will remain "flat" in 2010, although growth will resume in the summer of that year.

But 2011 remains "a little far out" for the CBI to predict growth.

Manufacturing production will decline by 12%, household expenditure will fall by 3.4%, but Government spending will rise by 2.5%, according to the business chief.

"These economic numbers do not make happy reading," he said.

Output orders, optimism and employment are also falling, according to the confederation's industrial trends surveys.

He said public finances were in a "dreadful state" with the Bank of England and the Treasury needing to raise 200 billion in bonds to finance the deficit.

"That will double over the next four years," Mr McMillan told delegates.

"The measures in the budget to tackle the public finances and their deterioration, in our view, were not sufficient and the next Government will need to deal with that."