Publication - Research and analysis

Scottish economic bulletin: January 2026

Provides a summary of latest key economic statistics, forecasts and analysis on the Scottish economy.

Part of

Inflation fell in November from 3.6% to 3.2%, partly driven by a fall in the rates of inflation for food and non-alcoholic beverages (4.2%, down from 4.9%), and alcohol and tobacco (4.0%, down from 5.9%).^[3]
More broadly, the inflation rate of goods prices fell from 2.6% to 2.1%, while services prices inflation also eased slightly from 4.5% to 4.4%. Services price inflation is still notably higher than goods price inflation, albeit has fallen from its recent peak of 5.4% in April and to its lowest rate since December 2024.
Core inflation (excluding energy, food, alcohol and tobacco) fell to 3.2% November, down from 3.6% in October.

Inflation remains above the Bank of England’s 2% target rate, although is currently on a downward trajectory and the Bank now expect inflation to fall more quickly in the near term and closer to target rate in April 2026, partly reflecting UK Budget announcements on administered prices and indirect taxes.
In December, the Bank’s Monetary Policy Committee (MPC) reduced the Bank Rate to 3.75%, judging that underlying disinflation has become more established, supported by the monetary policy position, subdued economic activity and continued loosening in the labour market, with wage growth and service price inflation softening further. In the medium term, there remains inflation risks in both directions.^[4]^,[5]

Thanks for your feedback