Scotland ‘resilient’ as economy avoids recession
Scotland saw narrowly avoided recession even though output slipped in the last month of 2022, according to official data.
Gross domestic product fell by 0.6% in December, after remaining flat in November.
However, it rose 0.1% in the final three months of 2022 following a 0.1% contraction in the previous quarter. Output remained 0.3% below pre-pandemic levels.
Services, which account for about three-quarters of Scotland’s economy, were flat for the final quarter. Production grew 0.2% and construction rose 0.6%.
Alister Jack, the Scottish Secretary, said: “Our economy has proven to be more resilient than many feared, but there are still challenges ahead. That is why it is our priority to halve inflation, reduce debt and grow the economy.
“Achieving sustainable growth for our long-term future is a priority.”
UK data also showed a recession had been avoided though there is a general assumption that it has been delayed.
The governor of the Bank of England, which raised interest rates to 4% last month, has hinted that more rises may be “appropriate” to contain inflation.
Andrew Bailey said the Bank’s monetary policy committee would await an extra round of data on inflation and the labour market before its decision on 23 March.
“I would caution against suggesting either that we are done with increasing Bank rate, or that we will inevitably need to do more,” Mr Bailey told a meeting in London.
“Some further increase in Bank rate may turn out to be appropriate, but nothing is decided. The incoming data will add to the overall picture of the economy and the outlook for inflation, and that will inform our policy decisions.”