SCOTLAND’s economy shrank by a fifth during lockdown, as the Scottish Government prepare to request Rishi Sunak extends the furlough scheme which could save 61,000 jobs.
Official figures on output showed lockdown hammered businesses across the sectors with construction hardest hit.
⚠️ Read our coronavirus live blog for the latest news & updates
It came as the Scottish Government published an analysis claiming that extending the furlough beyond the end of October “could reduce unemployment in Scotland by 61,000 through the first half of next year, at a cost of around £850 million”.
Overall, gross domestic product fell 19.4 per cent between April and June, following a 2.5 per cent contraction from January to March.
This compared to a UK-wide dip of 20.4 per cent in the same quarter.
But the huge plunge in GDP was not as bad as Scottish Government had predicted.In June, chief economist Gary Gillespie had forecast a fall of 30 per cent due to lockdown.
Provisional figures last month suggested the economy grew by 5.7 per cent in June as restrictions were relaxed.
But there are fears that the end of the furlough scheme at the start of November will lead to mass unemployment.
SNP Economy Secretary Fiona Hyslop said Holyrood needed more powers over taxation, spending and borrowing to help the recovery.
She said: “The coronavirus pandemic has had an extremely serious impact on the economy right across the UK and Scotland is no exception.
“We have worked hard to protect Scotland’s economy and ensure that as many people as possible keep their jobs and this is backed by a package of support to businesses that totals over £2.3 billion.
“Despite these efforts, the winding down of the UK Government’s furlough scheme will put even more jobs at risk – with over 217,000 people still furloughed in Scotland – and we remain disappointed the UK Government has declined to extend the Job Retention Scheme beyond October.
“It is now essential that the Scottish…