Mid East unrest 'may hit recovery'

Mar 2 2011

Political upheaval in the Middle East could have a knock-on effect on Scotland's fragile recovery from recession, it has been warned.

Economists at the University of Strathclyde's Fraser of Allander Institute said the Scottish recovery was at risk of faltering in 2011 amid uncertainty in the Middle East combined with worsening inflation, continuing weakness in bank lending and one of the harshest winters in decades.

They said the global markets are vulnerable to so-called "oil shock" as rising oil prices hit the agricultural, transport, construction and chemical sectors. The price of oil rose last week to almost 120 US dollars (£74) a barrel - up by 47% since the end of the third quarter last year.