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Scottish economy to lag UK recovery

With many experts expecting the UK economy to start recovering as a whole towards the end of 2010, a report by Ernst & Young has revealed that the Scottish economy is lagging the UK and will not resume growth until 2011 at the earliest. This is a significant blow for the SNP, currently in office, and could place further pressure on the public sector budget north of the border.

There are also serious concerns that Scottish unemployment has a long way to go with the Scottish financial sector, the backbone of the Scottish economy, set to come under severe pressure in the short to medium term. When you also consider that the SNP, as the leading party in Scotland, has no borrowing powers of its own in the Scottish parliament we could be set for a number of significant conflicts with the UK Treasury.

The Labour Party, for purely political reasons, will be driven to heap more pressure on the SNP and is highly unlikely to step forward with significant funding in the short to medium term. As a consequence, a number of the SNP policies which were central to their election campaign may need to be put to one side as Scotland struggles to attract inward investment in the short to medium term.

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