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Last Updated: Wednesday, 4 January 2006, 08:16 GMT
Scottish economy 'catches cold'
The report says Scotland's economy is following UK trends
Scotland has caught an economic "cold" from the rest of the UK and has shown signs of slowing down, latest research has found.

Nearly a third of almost 2,000 Scots firms in Lloyds TSB's business monitor survey reported a decrease in turnover in the three months to November.

Some 38% said turnover increased while 32% said it remained the same, giving a net increase of 8%, the report found.

It was less than half the net increase of 17% for the previous quarter.

It was also much less than the 32% recorded in the same period last year.

The business monitor noted that the services sector - which makes up 70% of Scottish economic output - had experienced the same slowdown as manufacturing.

The Scottish economy has caught some of the UK's cold but continues to show positive growth
Professor Donald MacRae
Lloyds TSB Scotland

Optimism in services about the next six months had plunged to the fifth lowest level in almost eight years and was below even that of the manufacturing sector, according to the research.

But manufacturing and services have both reported optimism over their ability to recruit staff over the next three months.

Professor Donald MacRae, chief economist of Lloyds TSB Scotland, said: "The Scottish economy has caught some of the UK's cold but continues to show positive growth.

"Relatively low interest and inflation rates, coupled with low levels of unemployment, continue to maintain Scottish consumer confidence.

"The UK slowdown has now reached the Scottish service sector but growth should still lie between 1.75% and 2% in 2006."

All is not gloomy, he pointed out, as the fall in demand for consumer credit and housing finance in the rest of the UK had not yet spread to Scotland.

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