Scots business confidence slips but still ahead of much of UK

But despite the country losing out to London in the confidence league, firms north of the Border have reported an improvement in key financial measures, with reported turnover and profits for the past 12 months double that of businesses in England.

The mixed findings in the latest UK business confidence monitor - published today by accountancy firm Grant Thornton and the Institute of Chartered Accountants in England and Wales (ICAEW) - add to the uncertainty surrounding the health of the Scottish economy.

Detailed figures on the country's economic performance in the last quarter of 2010 are likely to be published on 20 April, just two weeks before the 5 May Scottish Parliament poll. They are widely expected to mirror the UK performance from that Q4 period, when GDP contracted by 0.6 per cent, triggering fears of a double-dip recession.

Today's report notes that despite "many positive indicators" in the Q1 findings, confidence in Scotland has fallen to just 17.1, compared with a score of 35.6 two quarters ago. The latest reading is, however, ahead of the average index score for England, at 9.7, and considerably above the -6.7 recorded for Wales.

Some 1,000 chartered accountants were polled from across the UK, including 70 in Scotland.

Andrew Howie, managing partner for Grant Thornton Scotland, said: "It is perhaps not surprising that confidence has slipped as public sector cuts and the 20 per cent VAT increase will be beginning to bite.

"But it's not a signal to panic; turnover, profits and sales for Scots firms for the past 12 months are double that of firms in England which is encouraging."