THE economy is in a "desperate position" because the UK Government is pursuing the wrong policies and there is not much scope for the Scottish Government to do anything dramatically different to buck the trend, a leading expert says.

And Professor Brian Ashcroft, economics editor of the highly-regarded Fraser of Allander Institute commentary, believes the ability of the Holyrood administration to improve matters would be similarly restricted even if Scotland was independent, given the importance of a UK market which accounts for 66% of Scottish "exports".

Mr Ashcroft, emeritus professor of economics at the University of Strathclyde, told The Herald that the fastest way to boost demand in the economy would be to "fund the unemployed", and he cited research by the US Congressional Budget Office which he said supported this viewpoint.

His comments come at a time of intense pressure on Chancellor George Osborne to change course, with the UK having tumbled into double-dip recession amidst public spending cuts.

Contemplating recent economic releases, he declared that Fraser of Allander's forecast in June that the Scottish economy would grow by just 0.4% this year might even turn out to be "high".

He said: "Growth is still very, very, very weak."

Mr Ashcroft declared it was "staggering" there had been no growth in the UK since 2010 because you would normally expect strong expansion after a deep recession.

Asked about the Scottish economic position, he said: "We are in a desperate position because the [UK] Government has got the wrong policies.

"That is an end to it. We are part of the United Kingdom."

Mr Ashcroft declared the position in terms of Scotland's reliance on what happened elsewhere in the UK would be "the same whether we were independent or not because of the importance of the UK market".

He added: "Sixty-six per cent of our exports go to the rest of the United Kingdom. There is not much scope to do something dramatically different and to buck the trend. It is very, very difficult.

"Scotland is inter-connected. Clearly, to the extent the Scottish Government can start to spend money on capital spending, on infrastructure projects, if it can borrow in future, that could be helpful. I am mindful the scale of that is probably not sufficient to make that much of a difference."

He yesterday emphasised the need to boost demand.

Mr Ashcroft, who has put the case for raising unemployment benefits to provide a major and swift stimulus to the economy, said: "If it is about demand-boosting, we need to fund the unemployed because they are going to spend the money, not save it."

He added: "The British corporate sector is stuffed full of cash. It is not being spent. It is not being spent on investment because they don't see the investment opportunities available and because the investment opportunities aren't available because there isn't the demand they expect going forward."

Mr Ashcroft declared the UK had "one of the worst investment records in the world".

He added: "The private sector is letting us down, largely because of its bonus culture."

The Bank of England has been among those to raise concerns about the economic impact of bonuses in the financial sector.

Citing research by the US Congressional Budget Office, Mr Ashcroft said: "The one [measure] that is most efficient in terms of boosting demand quickly is basically supporting the unemployed more because they have a high marginal propensity to consume and they spend all they get."

Mr Ashcroft also cited a case for relief for employers on National Insurance contributions to help them recruit more workers.

He noted the importance of infrastructure projects in boosting the supply capacity of the economy but said these would "need to be ready to go pretty quickly".

Economic output in Scotland and the UK as a whole is around 4% below its peak preceding the 2008/09 recession.

Mr Ashcroft said: "You are still 4% below the pre-recession peak at the beginning of 2008. After a recession of that scale, you would expect fairly rapid growth. We have seen nothing of that...The economy hasn't grown since...2010. It is staggering."

Contemplating the global backdrop, Mr Ashcroft said the US economy "is picking up a bit" but "is itself weak" and that the situation in Europe was "pretty dire".