Political parties blame each other as shock figures suggest Scotland at risk of another recession

Over the last year Scotland's economy grew by just 0.4 per cent, far below the figure of 1.8 per cent for the UK as a whole.

Read more: Lib Dems press Sturgeon on legal challenge over independence vote bid

But there was surprise as the statistics revealed that it contracted, by 0.2 per cent, in the last quarter of last year. Over the same period the UK economy overall grew by 0.7 per cent.

Scottish Finance Secretary Derek Mackay said the fall north of the Border showed the "economic reality” of the June 2016 vote to leave the European Union.

He admitted that the economy faced other "challenges", including the slump in the global price of oil which has hit the North Sea, but said that its foundations were "strong".

The Conservatives claimed that Scotland was “on the road to recession” under the SNP.

Read more: Ex-Scottish minister says another independence vote would affect 'day job’

Both the Tories and Labour called on the SNP to retract its demand for another independence referendum.

Experts warned that Scotland could little afford a slowdown at the moment.

Jeremy Peat, visiting professor at the University of Strathclyde’s International Public Policy Institute, highlighted the fact that growth rates north of the Border would affect income tax revenues raised in Scotland.

He said: “This is just the wrong time for Scottish growth to be so significantly underperforming growth in the UK as a whole.”

The Scottish services sector was flat in the fourth quarter of last year, while production contracted by 0.9 per cent and construction output fell 0.8 per cent.

The North Sea’s woes have had a significant knock-on impact on the broader Scottish economy, while the construction sector has been hit by the fact that major infrastructure projects such as the Forth Replacement Crossing are coming to an end.

Nevertheless, the degree to which Scotland underperformed the UK as a whole in the fourth quarter surprised economists.

Mr Mackay laid much of the blame on the vote to leave the EU.

Read more: Lib Dems press Sturgeon on legal challenge over independence vote bid

"Before the EU referendum, the UK Government told us Brexit will make us 'permanently poorer'," he said.

“What is now quite clear is the economic reality of the Brexit vote.

"We have already seen significantly lower consumer confidence in Scotland since the vote last summer.

"Now we see that feeding through into our growth figures and all of this is before the UK actually leaves the EU."

Scottish Conservative shadow finance secretary Murdo Fraser said that the Scottish Government had to “take responsibility” for the disastrous figures. He also rejected the SNP’s claim that Brexit was to blame for the contraction in the economy.

“If that was the case, why is the rest of the UK powering ahead, while Scotland comes to a standstill?” he said.

“Scotland under the SNP is now on the brink of a recession.

"Nicola Sturgeon's Scottish Government must take responsibility for this mess.

“She has made Scotland the highest-taxed part of the UK and created more instability and uncertainty with her threat of a second referendum.

“Now we see the real-life impact of her mismanagement.”

He added: “Scotland's economy is facing a crisis. We need a Scottish Government in charge, not a campaign for independence.”

Read more: Ex-Scottish minister says another independence vote would affect 'day job’

Scottish Labour’s Jackie Baillie also called on the SNP to call off another independence referendum.

“These figures provide further compelling evidence that the last thing Scotland needs is another divisive independence referendum,” she said.

“With Scotland’s economy flatlining and Brexit creating unprecedented levels of uncertainty, it is time the SNP government in Edinburgh started taking some responsibility for its failures and acted to address them.

“The SNP should take a second referendum off the table and get back to governing the country.”