Scottish recession will continue deep into 2010, predicts Ernst & Young

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The Independent Online

Scotland's economy faces a torrid 12 month climb out of recession, lagging recovery across the rest of the country, the influential Ernst & Young Item club think tank has warned. In a damning assessment of Scotland's economic strength the group warns that the country's ailing financial sector will suffer a tumultuous 2010 with as many as 3,000 jobs likely to be lost.

"Recent announcements by the banks suggest that the process of rationalisation is yet to get into full swing," said Dogie Adams, a senior economic advisor to the Erst & Young Scottish Item Club. "However, we remain hopeful that the location of activity by some of the new players in the sector in Scotland will soften the loss of employment from the changes in the banking sector."

Output from Scotland's financial sector for the year to the end of June shrank by 8.4 per cent compared to 0.8 per cent in the rest of Britain. Scotland's large public sector is expected to shed 14,000 jobs in the next four years.