Scottish economy falls behind that of the UK

Scottish gross domestic product (GDP) grew by 0.1 per cent between April and June (Q2) 2015 compared with 0.7 per cent growth across the UK as a whole, the latest Scottish Government economy report stated.

On an annual basis, Scottish GDP grew by 1.9 per cent in the year to June 2015 compared with 2.4 per cent across the UK.

Growth in Scottish construction outstripped all other sectors growing by 3.5 per cent in Q2 2015, with annual construction output 18.5 per cent higher than last year.

This compares with more modest quarterly construction growth of 1.4 per cent across the UK.

While the Scottish construction sector continues to perform well, quarterly growth has slowed from between 5% and 6% for most of last year.

Output in the services sector was flat and the production sector contracted by 0.8 per cent.

The UK’s current account balance has improved from a deficit of 5.2 per cent of GDP in Q4 2014 to a deficit of 3.6 per cent of GDP in Q2 2015, according to the Office for National Statistics (ONS).

The ONS has also revealed UK mortgage borrowers are potentially exposed to changes in interest rates.

The average leverage of mortgage households has increased slightly during the economic recovery, although the fraction of households who are highly-leveraged with a debt to income ratio above 4.5 fell back slightly in 2013.

A quarter of highly-leveraged households were based in London in 2013 and a further 27% lived in the East and South East of England.