Fraser of Allander predicts 'slower' Scots recovery

Image caption,
Public sector cuts could have a greater impact on the Scottish economy

Scotland's economy will continue to recover at a slower rate than the UK as a whole, according to a leading economic research group.

The Fraser of Allander Institute also said it expected unemployment to continue rising.

The forecasts are contained in the institute's latest economic commentary.

It expects the Scottish economy to grow this year by more than the 0.7% it had first predicted, and that it will grow again in the next two years.

But it also said there was a fear welfare spending cuts may dampen growth in 2012 and that it expected the recovery in Scotland to be weaker than in the UK as a whole.

The institute also voiced fears that public sector cuts could have a proportionately greater impact on the Scottish economy.

It believes the cut in the Scottish budget could lead to a huge number of job losses over the next few years, although it was difficult to give an exact figure. Estimates have ranged from 49,000 and 113,000.

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