By Jamie Smith

The Scottish economy is being damaged by talk of a referendum over independence for the country, according to chancellor George Osborne.

Speaking on the BBC's Politics Show, the Conservative MP stated that the "uncertainty" and "instability" of the nation is proving to be damaging.

He criticised Scotland's first minister Alex Salmond for bringing up the subject of independence without having any firm plans over how he would be able to do so.

Mr Osborne stated he has been asked by business leaders about the state of the economy in Scotland, claiming they are being put off from making investments due to the independence speculation.

"I have told them go ahead with the investment, but I have to say those questions are being asked and I think it is having a direct impact on Scottish jobs and Scottish prosperity," she said.

Mr Osborne recently commended on growth figures for the British economy which showed expansion of 0.5 per cent during the third quarter of the year, describing them as positive.