UNEMPLOYMENT worsened and employment declined in Scotland in the last quarter, widening the gap with the rest of the UK, according to the latest official figures.

The Office of National Statistics (ONS) reported the number of people in work in Scotland fell by 20,000 to stand at 2.63m, with the employment rate falling from to 75.2 to 74.3 per cent.

In contrast, UK employment rose by 88,000 as the rate climbed from 75 to 75.2 per cent between October and December.

Unemployment rose by 14,000 north of the border to 124,000, up from 4.4 to 4.5 per cent.

The UK the rate rose 46,000 to 1.47m, or from 4.3 to 4.4 per cent, the first rise in two years.

The opposition parties said the figures were “worry” and “truly horrible”.

SNP employability minister Jamie Hepburn said both unemployment and employment had improved year on year, but said the latest quarterly numbers were “disappointing”.

He said the Scottish Government was investing in the economy and labour market with almost £2.4bn for enterprise and skills in the budget, and £720m of business rate reliefs.

He said: “These latest figures show 68,000 more people in employment compared to the pre-recession peak, with 17,000 more people in work over the year.

“It is encouraging we continue to outperform the UK on employment and unemployment rates for young people and women.

“It cannot be stressed enough that Brexit remains the single biggest threat to our economy.”

Tory Scottish Secretary David Mundell accused the SNP government of pursuing the wrong agenda on the economy, and criticised their decision to raise income tax for more than 1m middle-earners in the 2018/19 budget.

He said: “These figures are worrying and show that the gap between Scotland and the UK is increasing. The Scottish Parliament has more powers than ever before to boost the economy and promote growth and it needs to use them.

“It is troubling that instead of focussing on improving Scotland’s prosperity, the Scottish Government is choosing to hike taxes for thousands of hard working Scots. It is a fundamental mistake to make Scotland the highest taxed part of the UK.”

Professor Graeme Roy, director of the Fraser of Allander Institute, said that, after a brief upturn, the figures showed a slight fall-back in Scotland’s labour market performance.

He said: “Employment fell by 20,000 whilst unemployment rose by 14,000. The fall in Scotland’s employment rate over the quarter contrasts with the UK as a whole where employment rose.

“This weakening in the labour market is perhaps not that surprising given the relatively fragile performance of the Scottish economy in recent times.

It will be interesting to see if the figures are a blip or part of a shift in trend.

“That being said, the employment and unemployment statistics need to be put in a longer-term context. Unemployment remains relatively low by historical standards and there are still 10,000 fewer people unemployed in Scotland than this time last year.”

Labour MSP Jackie Baillie said: “These figures once again lay bare the extent of SNP and Tory mismanagement of our economy and their lack of an industrial strategy.

“In Scotland, unemployment is up, economic inactivity is up and employment is down. For SNP ministers to bury their heads in the sand and blame Brexit simply is not good enough.

“What’s more, we also see wages have failed to keep pace with inflation, squeezing pay packets and making the situation worse for many families who are already struggling to get by.

“The government should be using the £11bn a year we spend on public contracts and procurement to drive up labour standards, pay more workers a real living wage and ban zero hours contracts - because falling income and security for workers leads to falling productivity.”

The Scottish Liberal Democrats called the figures “truly horrible”.

Spokesperson Carolyn Caddick said: “Lost jobs are affecting tens of thousands of people.

"The overall measures are now worse than for the UK as a whole. All the previous boasts of Scottish ministers have come undone.

"We need the Scottish Government to focus on investment in people through education and mental health in order to boost productivity."

Tory MSP Dean Lockhart said: “The SNP only wants to hike tax, which will scare away investment and risk higher unemployment figures in future. The nationalists should listen to the experts and keep taxes competitive for workers and businesses.”