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Publication - Research and analysis

Scottish economic bulletin: October 2025

Published
17 October 2025
From
Chief Economist
Directorate
Chief Economist Directorate
Topic
Economy
ISBN
9781806433087

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

Part of

View supporting documents Supporting documents

Economic Outlook

Economic growth forecast to remain relatively stable across 2025 and 2026.

  • In May, the Scottish Fiscal Commission (SFC) forecast Scottish GDP growth to slow to 1.1% in 2025, down from 1.2% in 2024, before rising to 1.8% in 2026 and 1.7% in 2027. In the short term, this is broadly in line with the most recent forecast from the Fraser of Allander Institute in October which forecast growth of 1.0% in 2025 before remaining more subdued across 2026 and 2027 (1.0% and 1.1% respectively).[21],[22]
Scotland GDP and Forecast
Bar chart showing the SFC forecast Scotland’s GDP to grow 1.1% in 2025 before rising to 1.8% in 2026.
  • This highlights the uncertainty in the economic outlook beyond this year, albeit that the UK growth outlook has also moderated during the year. In March, the Office for Budget Responsibility forecast the UK economy to grow 1% in 2025, rising to 1.9% in 2026 and 1.8% in 2027.[23]
  • More recently in August, the Bank of England forecast more balanced growth of 1.25% in 2025 and 2026 rising to 1.5% in 2027, while the average of new independent UK forecasts in September shows that UK GDP is forecast to grow 1.2% in 2025 before moderating to 1.1% in 2026.[24],[25]
UK GDP and Inflation Forecasts
Bar chart showing UK GDP growth is forecast to weaken slightly over 2025 and 2026 while the annual inflation rate is forecast to remain above the 2% target in 2025 before falling back to 2.3% in 2026.
  • Part of the downward revisions to growth forecasts in part reflects ongoing challenging domestic conditions with above target inflation expected to remain more persistent than previously expected. The Bank of England forecast inflation to rise temporarily to 4% in the second half of this year before more gradually falling back to target in 2027. The average of independent forecasts indicate Q4 on Q4 inflation in 2025 will be 3.6%, remaining above target at 2.3% in Q4 2026.
  • The global economic outlook also remains challenging and presents headwinds to growth. Most recently in October, the IMF forecast global growth to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026.[26] This reflects a slight upward revision in the short term from previous forecasts in April as activity held up more strongly than expected in the first half of the year. However, the IMF set out that the overall economic environment remains volatile with risks remaining tilted to the downside.

Contact

Email: economic.statistics@gov.scot

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