Commenting on the latest UK GDP figures published today by the ONS, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, said:
“Stronger than expected growth of the UK economy in the final quarter of 2020 was only the slightest reprieve. A temporary boost from the release of pent-up demand in December and Brexit stockpiling was a brief offset to the squeeze on output from the November lockdown.
“There is little to cheer in the latest data. Despite avoiding a double-dip recession, the output is still well below pre-pandemic levels. What these figures confirm is that 2020 was a historically bleak year for the UK economy.
“Modest growth at the end of 2020 is set to be followed by a substantial fall in output in the first quarter of this year as the current lockdown, the unwinding of Brexit inventories and disruption to UK-EU trade flows combine to suffocate activity. Many Scottish businesses have already encountered severe problems with the new EU – UK trading arrangements, particularly in our invaluable food & drink sector.
“While the vaccine rollout offers some scope for optimism, the scarring caused by the pandemic is likely to crystallise as government support winds down. This as well as the prospect of persistent post-Brexit disruption means any recovery may be slower than the Bank of England currently predicts.
“The current drip-feed approach to support measures means firms cannot plan for more than a few weeks ahead and jobs in Scotland will continue to be lost without intervention. We need businesses to survive if the economy is to eventually recover. It is critical that the government swiftly implements a package of measures that support businesses and the economy for the whole of 2021, including removing the cliff-edges for business rate reliefs, VAT deferrals and furlough.”