Despite recent positive signs of growth, the British economy remains fraught with "deep-rooted problems" which the UK Government is failing to tackle, a Sheffield-based think tank will warn today.
It argues that, as a result, potential benefits to the Scottish economy have been squandered in favour of boosting financial services concentrated in London.
A new report by the Sheffield Political Economy Research Institute (SPERI), says the fall in value of the pound after the 2007-08 financial crisis should have helped boost British exports and cut the UK's £30 billion trade deficit.
Instead, British manufacturing exports remain weak and the trade deficit stays high. This contrasts with previous spells of sterling depreciation, in the mid-1970s and early 1990s, which saw significant improvements in the UK's balance of payments.
"The UK economy has been unable to take advantage of sterling's fall in value due to decades of under-investment in sectors like manufacturing," report author Craig Berry, a SPERI research fellow, told the Sunday Herald. "George Osborne promised a 'march of the makers', but there is depressingly little evidence of a manufacturing resurgence."
The report is published just days after the Chancellor told an Edinburgh audience that as part of the UK, Scotland benefits from "one of the most successful currencies in the world".
But the persistence of a substantial gap between the levels of UK imports and exports raises questions about the effect British monetary policy has on the Scottish economy.
"Our research shows UK monetary policy has failed to realise the potential for a regionally inclusive export strategy," Berry said. "The Coalition Government should have taken advantage of the pound's relatively low value by investing in tradeable sectors outside the Square Mile [London], primarily manufacturing. Such a strategy would have benefited the Scottish economy proportionately more than the UK economy as a whole, because of the greater concentration of manufacturing in Scotland."
Berry cited over-reliance by the British economy on financial services, concentrated in London and the southeast, as a major contributor to the trade deficit in recent years. He said: "Primary responsibility for the trade deficit lies with London and southern England, as both these areas import more than they export. Southern England's main contribution to Britain's export base - financial services trade - is too dependent on the crisis-hit eurozone."
However, Berry also warned the SNP currency-union plan rejected last week by the three main Westminster parties would leave the Bank of England in control of Scottish monetary policy and could restrict an independent Scotland's manufacturing revival.
He said: "The dominance of the City over British monetary policy is what would make currency union such a high-risk strategy for an independent Scotland. Policy-makers in London would have even fewer incentives to consider Scotland's economic interests."
This view is shared by Stephen Boyd, assistant secretary of the Scottish Trades Union Congress (STUC), who said: "Lots of people have argued that UK monetary policy has been a brake on Scotland's industrial development. It is difficult to see this changing under the [currency] arrangements proposed by the Scottish Government's Fiscal Commission."
SPERI's analysis is also supported by James Meadway, senior economist at the New Economics Foundation (NEF) and a former Treasury policy adviser. "The plummeting pound should have been a huge boost to UK exports,'' he said. ''Instead, we are still buying far more from abroad than we are exporting. This means we have a seriously weak economy that just can't pay its way in the world, relying instead on borrowing from overseas.
"Overcoming longstanding economic problems like low investment and rising inequality will need more than hoping for a wobbly exchange rate to sort everything out - it'll need direct intervention by government. An independent country should have no qualms about using its own currency and setting its own monetary policy."
SPERI's report reinforces the position of prominent pro-independence campaigners such as Patrick Harvie and Dennis Canavan, who argue an independent Scotland would have to ditch the pound before it could rebalance its economy away from finance and towards manufacturing.
The briefing also adds weight to SNP claims that Scotland, with oil and whisky exports, contributes positively to the UK's balance of payments - a contribution that would vanish without a formal post-UK currency union.
Commenting on the research, Finance Secretary John Swinney said: "This report provides further evidence of the imbalances in the UK economic model, and the failure of the UK, to date, to rebalance its economy to a more sustainable model."
"For example, the substantial decline in the UK manufacturing sector - which now accounts for a much smaller part of the British economy compared to many key competitors - explains, in part, why the UK has been in a current-account deficit in 29 of the last 33 years; while in 2013 Q3 the UK current account deficit, as a percentage of GDP, was at its highest level since 1989 Q3.
"Scotland needs a different approach. As set out in Scotland's Future, with the powers of independence future Scottish governments would be able to draw on the full spectrum of tax, regulatory and public-spending levers to establish an industrial strategy and rebalance the Scottish economy.
"At the heart of this approach our industrial strategy would focus on diversifying Scotland's industrial base and promote manufacturing, innovation and productivity. With a sharp focus on stimulating investment and trade, our industrial strategy would also be closely aligned with foreign policy and international engagement."
Tory MSP Murdo Fraser said: "Scotland benefits hugely from being part of the economic deliberations of the Bank of England, as well as the UK's extensive diplomatic network, promoting Scottish products and services around the world. Last year, the Prime Minister led trade missions on an unprecedented scale to China and India - showing the Government's commitment to … supporting British business abroad."