Scotland business

PwC forecasts fall in Scottish economic growth

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The Scottish economy is expected to slow down next year as employment growth continues to be negative, according to business advisers PwC.

They predict economic growth will fall from 1.8% in 2016 to 0.9% in 2017.

Growth for the UK is also forecast to fall, from 2.1% this year to 1.2%.

PwC's latest UK Economic Outlook report blamed the UK-wide slowdown on "the drag on investment from increased political and economic uncertainty following the Brexit vote".

However, it predicted that both Scotland and the UK should manage to avoid recession.

'Opposite trend'

Scotland is expected to be the only part of the UK to see continued negative figures for employment growth.

The report said more people would be "economically inactive" in the coming year.

PwC partner Paul Brewer said official job figures for June to August showed the economic inactivity rate for working-age adults fell UK-wide compared with the previous year.

But he pointed out that the trend had moved in the other direction for Scotland.

Mr Brewer said: "When you break down the Scottish figures, you see that the inactivity rate for men has only increased very slightly over this period from 17.9% to 18%, but the female rate has risen much more markedly from 24.5% to 26.5%.

"Our recent work...suggests that the health of the working age population is one factor but there is a challenge here to identify why this is happening and what - if anything - can be done to address it."

PwC said it expected UK inflation to rise to about 2.7% by the end of 2017 as the effects of a weaker pound fed through to consumers, squeezing real spending power.

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