Ernst & Young report predicts a decade of pain
29 Jun 09
Ernst & Young's Scottish ITEM Club has said a return to 2008's employment levels is unlikely before 2017 and although Scotland's private sector economy appears to be heading out of recession, it's doing so at a slower rate than much of the rest of the UK
Ernst & Young’s Scottish Item Club has said a return to 2008’s employment levels is unlikely before 2017 and although Scotland's private sector economy appears to be heading out of recession, it’s doing so at a slower rate than much of the rest of the UK.
E&Y forecast that the economy will contract by 3.1 per cent this year, it will stagnate next year, and get back into weak growth in 2011.
However, the analysis concluded there is reason to be "cautiously optimistic that a corner has been turned".
"Scotland has benefited greatly from a decade of public spending growth," said the report. "The likelihood is that there is now almost a decade of pain and discord to come.
"The menu is unappetising - falling real spending on services, higher taxes and charges and even cuts in public sector employment terms and conditions.
"The governments taking power in Westminster and Holyrood next year will not be able to look forward to popularity whatever they do, but the need to reassure the gilt and currency markets will be paramount."
Dougie Adams, economic advisor to the Ernst and Young Scottish Item Club, said: "Whilst there have been some early signs that the Scottish economy is beginning to stabilise, the patient is still a long way from recovery.”
Visit www.camagonline.co.uk/videos to watch Dougie Adams's interview.