Scotland's economy is expected to dip by the end of the year

The Bank of Scotland's latest economic indicator said lower spending on the high street and increased fuel and energy costs would have an effect.

But experts predict a healthier economic performance next year, with the business sector performing well alongside a buoyant housing market.

Tim Crawford, BoS economist, said the future was looking positive.

An increase in interest rates and a fall in new car registrations - which are viewed as a useful guide to consumer spending - point to a fall in economic growth.

Registrations were down 7.3% year-on-year during June - the 13th consecutive month they have decreased.

'Engine of growth'

Mr Crawford said next year was looking healthier in economic terms, adding: "Economic growth in Scotland is proving much more resilient than the UK average.

"Although growth seems likely to slow slightly over the remainder of this year, it should remain at an above average rate and looks likely to firm up by the middle of next year.

"The business sector is likely to be the main engine of growth but the resilience of the Scottish housing sector should also provide some support."