Scotland’s GDP – Q2 2018

The latest GDP estimate for Scotland has seen Scotland outpace UK growth in the second quarter of 2018, with GDP growing by 0.5%, in contrast to 0.4% growth for the UK as a whole.

Commenting on the figures, Liz Cameron, Chief Executive, Scottish Chambers of Commerce said:

“It’s fantastic to see Scotland’s economy growing despite some of the uncertainty surrounding the broader trading environment. Over the year, we’ve seen Scotland outpace the UK, with GDP increasing by 1.7%, compared to the UK’s 1.3%.

“Growth was driven by a range of industries, including distribution, hotels and catering, manufacturing, and business services and finance.

“It’s also excellent to see our construction sector, which was particularly challenged by the adverse weather in the first quarter of the year, return to growth rapidly. These recent statistics suggest growth of 1.8% this quarter, higher than the 0.9% observed across the UK as a whole.

“It’s testament to the resilience and innovation of our businesses that Scotland has outpaced the UK this quarter, however, this is certainly no time to be complacent. Scottish Chambers of Commerce, and our business members, look to the UK’s respective governments to continue to reform policy to ensure that business has the best chance to capitalise on this recent growth and further strengthen our economy.”

Inflation

The latest UK inflation figures show that consumer price inflation (CPI) has increased from 2.5% in July to 2.7% in August 2018. This is the second consecutive rise in inflation, and the highest level since February 2018.

Inflation was driven by a range of factors, with transport costs in particular acting to push up the rate. Transport prices have risen by 6% across the year, propelled upwards by the price of motor fuels. Recreation and culture prices have also experienced the joint highest 12-month rate since January 2010.

Commenting on the figures, Liz Cameron, Chief Executive, Scottish Chambers of Commerce said:

“Although the inflation increase for July had been widely expected by economists, this subsequent rise in August had not been predicted, and many economists were expecting the CPI rate to drop to around 2.4%.

“This unexpected rise means that wage growth has once again remained relatively flat, impacting on the spending power of UK consumers.

“These figures highlight the importance of the UK Government negotiating a pragmatic deal urgently for the UK’s future relationship with the European Union. The increase in the value of the pound will have helped to insulate consumers and manufacturers from the cost of imported goods and materials, but bad news from Brussels could act to push sterling downwards, and ramp up pressure on businesses to raise prices.”

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