Banking

The Scottish economy is growing at a slower rate than last year, according to Lloyds TSB.

Research from the bank found that 36% of Scottish firms reported an increase in turnover during the three month period ending in February 2008. A further 36% of firms surveyed reported static turnover and 28% reported a decrease. This resulted in a net increase of 8%, representing a fall on the previous quarter and less than a third of that recorded for the same quarter in 2007.

According to Lloyds TSB, however, expectations of increasing turnover in the next six months have improved. The overall balance for turnover for the next six months is predicted to be +23%, up on the +17% of last quarter, but still short of the 39% increase of the same quarter one year ago.

Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said: Scottish economic growth is slowing from the latest annual underlying growth rate of 2.1%. However, consumer confidence remains robust as evidenced by the latest annual increase in retail sales of 7.1%.

Although this report has recorded a slowing in the Scottish economy at the end of last year and the beginning of 2008, business expectations for the next six months have improved. There is no evidence of restriction in credit or rising levels of concern about credit costs. Costs overall are however a concern for most Scottish businesses. After above trend growth in 2007, the Scottish economy is facing reduced growth in 2008 nearer to its long-term growth rate.