Scotland’s economy ‘grinding to a halt’ in wake of credit crunch

Many firms in Scotland could be facing the possibility of bankruptcy, as a new report has suggested that the country’s economy is “grinding to a halt”.

The latest Scotland business monitor from Lloyds TSB has revealed that 39 per cent of companies surveyed said they had experienced a decrease in turnover over the three months ending on August 31st.

A further 32 per cent reported static turnover and 29 per cent claimed they had seen an increase.

This gives a net figure of minus ten per cent – a ‘significant’ drop from the previous quarter’s level of 11 per cent.

Chief economist Donald McRae remarked: “The business monitor shows the Scottish economy feeling the effects of the credit crunch with slowing output, increasing costs and falling expectations.”

He added that the report represented the most pessimistic outlook in ten years.

Meanwhile, the Royal Bank of Scotland has launched a new range of savings accounts, including a cash ISA with rates of up to 7.25 per cent.

By Jamie Price