Scotland’s economy slumps as lockdown measures hit

Scotland's economy shrunk for the first time in six months in November as the impact of fresh lockdown measures took effect.
Pubs on Edinburgh's Grassmarket have been among those forced to shut downPubs on Edinburgh's Grassmarket have been among those forced to shut down
Pubs on Edinburgh's Grassmarket have been among those forced to shut down

Growth was down by 1.4 per cent and the outlook across the economy north of the Border was 7.1 per cent below the level in February when the pandemic struck.

The closure of shops, bars and restaurants in November was the main reason behind the latest fall in growth.

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Scotland's economy secretary Fiona Hyslop said: “Like the rest of the UK, Scotland’s economy has been badly hit by the coronavirus (Covid-19) pandemic.

"As a result of the restrictions we have had to put in place control the virus, our economy is now 7.1 per cent smaller than it was pre-Covid-19, while over the same period UK economy has shrunk by 8.5 per cent.

"Combined with the huge economic uncertainty caused by Brexit, this remains an extremely tumultuous time for the economy and jobs.

“As a responsible government, we continue to do all we can to protect Scotland’s economy and ensure that as many people as possible keep their jobs. This is backed by our package of support to businesses that totals over £3 billion, and our support for economic recovery worth more than £1bn.”

The fall in GDP was driven by the slump in the accommodation, food services and retail sectors, which contributed to a 2.2 per cent overall in the services sector.

The latest figures also show the production and construction sectors continued to grow.

The production sector increased by 0.8 per cent overall, with growth in manufacturing, mining, water and waste offset by a fall in the electricity and gas supply industry. Construction sector output is estimated to have increased by 1.8 per cent compared to October.

Scotland, like the rest of the UK, saw the economy shrink by about a fifth over the course of the first lockdown last spring. But growth had begun to recover until the second wave struck late last year and fresh restrictions were imposed in an effort to suppress the the spread of the virus.

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The figures were released as finance secretary Kate Forbes prepares to set out her budget at Holyrood in Thursday in a bid to stimulate growth.

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