Scottish economic growth to 'accelerate'

06-11-2006

Scottish economic growth to 'accelerate'
Economic growth in Scotland is set to pick up during the fourth quarter of 2006 and continue to "accelerate" into next year, according to a new report.

The annual rate of growth is expected to rise above previous estimates of 2.2 per cent by April 2007, before reaching 2.8 per cent in August of next year, the Bank of Scotland claims.

In its latest index of leading economic indicators, the bank suggests that stronger growth will be fuelled by rising confidence amongst Scottish businesses and an increasing desire by employers to add to their workforce numbers.

The Bank of Scotland said that its own recent labour market report, showing a rise in demand for permanent staff reflected growing business confidence, which was also shown to have remained essentially positive during the third quarter of 2006, with the Confederation of British Industry (CBI) recording a balance of 11 per cent of Scottish companies who were optimistic about their prospects over the period.

Rising consumer confidence and data showing growing numbers of new car registrations in Scotland also suggested that increasing consumer spending was helping to fuel economic growth, the Bank of Scotland said.

The bank's index pointed to the latest consumer confidence poll published by GfK NOP, which showed that confidence improved from a balance of minus ten in August, to minus four in September.

Meanwhile, data from the Scottish Motor Trade Association showed that new car registrations increased at an annual rate of one per cent in the three months to September - the first year-on-year rise since May 2004.

The Bank of Scotland's optimistic outlook for economic growth follows last month's decision by the Fraser of Allander Institute to raise its own forecast for Scottish economic growth for 2006.

The thinktank, which is based at Strathclyde University, increased its growth forecast for the year from 2.1 per cent to 2.2 per cent on the back of stronger overall UK economic growth.


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