AROUND three in 10 Scottish businesses have scaled back new investment because of Brexit uncertainty, and growth of private-sector activity slowed sharply in the latest three months, a survey shows.

The survey by the University of Strathclyde’s Fraser of Allander Institute in conjunction with law firm Addleshaw Goddard, published today, shows the Scottish financial services sector achieved the strongest growth in the three months to August. In contrast, the accommodation and food services category showed a sharp contraction during this three-month period, and manufacturing slipped back into reverse with a modest dip in activity.

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Subtracting the proportion of Scottish businesses reporting a fall from that recording a rise, a balance of five per cent achieved an increase in activity in the three months to August. This signals slight growth.

Professor Graeme Roy, director of Fraser of Allander, said Scottish businesses were remaining resilient but noted the survey showed more than 90% expected the ongoing economic uncertainty would have an”important” or “very important” impact on operations in coming months.

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The survey highlights optimism among businesses operating in, or with key activities linked to, the energy sector.

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Malcolm McPherson, senior partner at Addleshaw Goddard in Scotland, said: “These figures show firms are not relaxed in spite of incremental growth and remain focused on weathering the storm that is Brexit, scaling back growth ambitions and investment accordingly. There are some exceptions, such as the energy sector, including both traditional oil and gas, and the renewables industry. Energy continues to attract investment.”