Scottish jobs boost but IMF slashes UK economic forcast

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By Martin Kelly
 
The number of Scots finding employment has risen again, according to a survey of recruiting agencies carried out by the Bank of Scotland (BoS).
 
The moderate increase in those finding work was driven by the IT and computing sector which was one of five sectors that showed improvement.  However the good news was tempered after it emerged the IMF had slashed its economic growth prediction for the UK.

The good news on the Scottish jobs front came one week after figures indicated the Scottish economy was showing signs of improvement.  Last week the BoS Purchasing Manager’s Index showed a slight increase in employment and an increase in new business in the private sector.

Humza Yousaf, SNP MSP for Glasgow – which recorded the fastest rise in permanent placements in June – welcomed the jobs news.
 
He said:
 
“We face an extraordinarily difficult situation of rising unemployment across the UK due to the Tory – Lib’s austerity politics but the Scottish Government’s resistance to this is commendable, and is once again reflected in this survey.
 
“In Scotland, we now have the highest share of private sector employment since devolution.
 
“This trend, which is all the more remarkable given the savage cuts being inflicted by Westminster, demonstrates the real difference between the action taken by the Scottish Government and the UK Coalition. 
 
“There is no room for complacency and we will continue to push the UK Government to invest in the list of shovel ready projects which we have provided to Westminster which would boost jobs and stimulate the economy.”

The Scottish economic upturn is in contrast to a widespread slowdown across the rest of the UK.

The UK slump was illustrated yesterday when the IMF slashed its economic growth forecast for 2012 for the UK by three quarters – from 0.8% down to 0.2%.

The downgrading followed a warning by the IMF in May that the UK economy was facing a “substantial contractionary shock” that could prolong the current recession if urgent action was not taken.
 
In a report in May, the organisation said the Tory/Lib Dem Coalition should start preparing a Plan B, featuring temporary tax cuts and increased spending on infrastructure, to support the UK economy.

Christine Lagarde, Managing Director of the IMF gave a long list of actions which she believed the UK Chancellor should be taking that included “greater infrastructure spending.”

Figures released last week showed the construction sector in the UK contracted sharply over the last twelve months.

The Office of National Statistics said the sector saw a fall of 6.3% compared to May last year.  The decline was driven partly by UK Government public spending cuts which saw public works fall by 22%.

Last week the Scottish Chamber of Commerce joined a growing number of voices urging more spending on infrastructure to help boost the UK economy.

Garry Clark, Head of Policy and Public Affairs at Scottish Chambers of Commerce, said:

“The Scottish Government has led the way in identifying increased capital spending as an important policy in helping to address economic stagnation and it is now time for the UK Government to act boldly to stimulate demand and to reduce the focus on austerity; the evidence clearly shows that the current mix of policies of mainly austerity and limited support for growth is holding back any economic recovery.  The Government’s economic plan needs to move to a new phase focused on growth”

The SNP has consistently called for an injection of capital spending to help boost the economy and have listed 30 ‘shovel ready’ projects that could create over 4000 jobs in Scotland.