BREXIT and the UK Government are responsible for Scotland's economy shrinking, Finance Secretary Derek Mackay has said.

New figures show GDP fell by by 0.3% over the quarter from April to June. The UK economy fell by 0.2% drop over the same period.

Scotland's had grown by 0.6% in the first three months of 2019.

The report said: "The biggest falls have occurred in sectors which showed large increases in the previous quarter. The previous growth was likely to be due to stockpiles being built or work being brought forward ahead of the original planned exit date from the European Union."

Mackay said: "Given the repeated warnings from business organisations and the contraction across the UK in the same quarter, it is unsurprising but deeply frustrating that we are now seeing the Brexit impact on the Scottish economy.

"The responsibility for this contraction lies entirely with the UK Government."

With the UK preparing to leave the EU at the end of next month and Prime Minister Boris Johnson having pledged to complete Brexit by then "do or die", Mackay said: "There can now be no doubt that any form of Brexit will damage our economy and a No-Deal Brexit would be disastrous for Scotland and could push the country into recession."

He added: "Scotland did not vote for Brexit but our economy is paying the price for it and we are likely to see continued volatility as businesses try to prepare for the looming October Brexit deadline and the increasing threat of a No-Deal exit.

"We are already taking steps to protect jobs and our economy from Brexit but not every impact can be mitigated."

The quarter two figures showed GDP in Scotland was up by 0.7% over the year, while the UK economy grew by 1.2% over the period.

In the first three months of 2019 more than half of GDP growth came from two sectors - the manufacturing of spirits and wines, and pharmaceuticals.

This was linked to stockpiling ahead of an earlier EU exit deadline, with the statistics for April to June showing a "downturn in growth in these same industries, which may be the result of companies running down the stockpiled inventories".

Economist John McLaren said: "Like the UK, Scotland's economy has performed poorly in the second quarter of 2019.

"This was largely down to a reversal of the, stockpiling related, fast growth seen in nanufacturing in quarter one."

Scottish Secretary Alister Jack said he was "concerned the Scottish economy has shrunk over the last quarter and continues to lag behind UK-wide figures".

He added: "Coming on the back of disappointing unemployment figures, more needs to be done to boost our economy and close the gap."

Scottish Liberal Democrat leader Wille Rennie said: "The impact of Brexit is hitting investment, jobs and living standards and the main phase hasn't even happened yet."

Andrew McRae, of the Federation of Small Businesses, said: "Across the country, firms are either pouring resources into Brexit planning or postponing critical decisions until our political leaders get their act together.

"That means that they're not using every tool at their disposal to create jobs and drive growth. The small business priority is to avoid a No-Deal, no-transition Brexit in just a few short weeks.

"Where possible, every business leader needs to take action to mitigate the risk of this chaotic outcome. But there's no way such a scenario wouldn't squeeze many operators. It must be avoided."

He added: "North of the Border, Holyrood decision-makers need to take note of the storm clouds on the horizon.

"The upcoming Scottish Government Budget must focus on providing much needed stability and at every turn ministers need to think twice about putting additional burdens on local firms."