PRECARIOUS employment and the so-called “gig economy” will underpin Scotland’s stalling growth in the coming years, the Government’s independent forecaster has said.

The Scottish Fiscal Commission (SFC) said issues around flexible work “implicitly” lay behind its analysis of Scotland’s subdued prospects at a time of record employment.

And commissioner David Wilson insisted Brexit could lead to “further pressures and changes” once the impact on migration becomes clear.

The SFC previously forecast GDP would grow below 1 per cent a year to 2022 – suggesting a period of “exceptionally weak growth” not witnessed in six decades, according to economists.

Mr Wilson said the “central expectation” is that productivity will stall while employment not only remains at record levels, but continues to rise.

He added: “In terms of what that will actually feel like on the ground, or feel like in terms of the labour market processes, I think it tells a story of a continuation of the sort of trends that we have been seeing in the recent past.

“The flexible labour market that we’ve seen across the UK and in Scotland is the key feature going forward.

“So issues about so-called precarious employment, the trends between part-time and full-time, wider issues around the gig economy – we haven’t dwelled on that in any great detail in our report or drawn out the implications of that, but implicitly underpinning our forecasts are those sort of trends [which] we would expect to continue.”

Speaking at Holyrood’s Economy, Jobs and Fair Work Committee, Mr Wilson said the gig economy had “interacted with our productivity performance” since 2008’s crash.

He said: “We, both in Scotland and the UK, appear to be recovering from the recession post-financial crash and have found ourselves in what’s been described as a low productivity growth, high employment scenario. That’s where we appear to be, and at its heart that’s what our forecast would expect to continue.

“The fact that we’ve got record levels of employment in many ways is a very positive thing, but that has had its consequences for productivity.

“Has the flexibility of the labour market across the UK, and in Scotland in particular, interacted with our productivity performance since the recession to lead us to where we are – undoubtedly yes.”

Mr Wilson – who is also executive director of the International Public Policy Institute at Strathclyde University – said a key issue in the future would be the impact of Brexit.

He added: “If there is lower in-migration and perhaps changing out-migration from Scotland, that might lead to further pressures and changes in the labour market.

“Many people are speculating about what the potential impact of that might be. We have yet to do full assessments of all of that.

“But if there is a situation where you’ve got high levels of employment and low levels of unemployment, and reduced migration, that is an added and reinforced dynamic in the labour market.”