THE Scottish economy grew in the first three months of this year despite uncertainty around the UK’s expected departure from the EU, according to official figures.

Finance Secretary Derek Mackay said the growth in Scotland’s GDP, combined with a record high employment rate of 75.9%, was evidence the economy is going from strength to strength, but warned a no-deal Brexit will “take us from growth to recession”.

However, Scottish Secretary David Mundell claimed “threats” of a second independence referendum and the Scottish Government’s taxation plans were “holding the economy back”.

Scottish GDP grew at the same rate as that of the UK – 0.5% – over the period. It Compared to the same period for last year, Scottish GDP grew by 1.4% while UK GDP grew by 1.8%. Analysis suggested growth was driven by the manufacturing and construction sectors, which grew by 2.6% and 2% respectively.

Two sub-sectors of manufacturing, food and drink and pharmaceuticals, accounted for more than half of the 0.5% growth during the quarter, with some suggestions the increase in manufacturing was due to stockpiling for Brexit.

Mackay said: “Growing the economy is a priority for the Scottish Government and we can see from these results it is working. We have provided more than £5 billion of capital investment to build and modernise Scotland’s infrastructure, and a wider package of support to businesses including maintaining a competitive business rates package and providing the most generous package of non-domestic rates reliefs anywhere in the UK.”

He added: “The months and years ahead are crucial as we continue to invest in and grow the economy.

“However, the UK Government’s EU exit plans, in whatever form, will damage the Scottish economy. The Scottish Government has consistently been clear that the best option for the future wellbeing and prosperity of Scotland is to stay in the European Union.

“Otherwise we will see damage to our economy and the future prospects of the people of Scotland suffering. The growth and economic stability currently being experienced in Scotland is seriously threatened by the UK Government’s Brexit obsession. Indeed, a no-deal Brexit is set to take us from growth to recession.”

Mundell said: “Scotland’s economy is continuing to grow but I’m concerned that we have not matched the UK growth rate over the past 12 months. We need to close the gap.

“The UK Government is investing in Scotland’s economy, for example with our £1.3 billion city and growth deal programme. I’d urge the Scottish Government to work with us and to use the powers at their disposal to best effect. It is increasingly clear their threats of a second independence referendum and decision to make Scotland the most highly taxed part of the UK are holding our economy back.”