Scottish growth outperforming UK

The finance sector was the major contributor to a strong 4th quarter

The Scottish economy outperformed the rest of the UK in the final quarter of 2007, according to Scottish Government figures.

But the overall figures for last year show Scotland's 2.2% growth in gross domestic product still lagging behind the UK at 2.9%.

Finance Secretary John Swinney said the statistics showed Scotland needed to become a more competitive environment.

He added growth was likely to slow in the first quarter of 2008.

Mr Swinney said: "The Scottish economy grew at a faster rate than the UK in the last quarter of 2007, a welcome and positive piece of news in the current climate.

"The financial services sector was buoyed by the highest ever quarterly growth in banking.

"But overall growth over the year lags behind the UK growth rate, highlighting the important focus of the Scottish Government on increasing sustainable economic growth.

The latest publication for Scotland continues to exhibit some worrying and often unexplained trends Centre for Public Policy for Regions

"It brings into sharp relief the urgent need to make Scotland a more competitive environment to put us on the course for long-term success and achieve our target of matching the UK growth rate."

Analysing the figures, the Centre for Public Policy for Regions (CPPR) highlighted that the figures showed that the faster Q4 growth than the UK was "largely down to 'Business services and Finance' and 'Other services'."

The think tank's research added: "Hotels and Catering in Scotland continue to flat-line as opposed to the UK's continuing fast annual growth."

But the CPPR analysts also criticised the figures themselves: "The latest publication for Scotland continues to exhibit some worrying and often unexplained trends.

"In a number of sectors it is difficult to fathom the economic explanation for past and current movements.

"If judgements are to be made based on whether we succeed or fail to meet targets then such targets need to be reliably measured.

"For this reason we believe that the time will surely come when there will need to be a comprehensive review of the data used to measure Scottish economic growth."

In response, a Scottish Government spokesman said: "GDP statistics are compiled to high professional standards, in accordance with National Statistics Code of Practice, and undergo regular quality assurance reviews to ensure that they meet customer needs.?