UK economic and fiscal outlook: summary

Summary of the UK economic and fiscal outlook ahead of the Scottish Budget 2024 to 2025.

In November, the OBR downgraded their economic growth forecasts for 2024 to 2026, presenting a more challenging economic outlook than previously, with slower growth and inflation and interest rates expected to remain higher for longer.

GDP growth forecast

The OBR UK forecasts show:

  • GDP growth to average 1.5% over 2024 to 2027, 0.6 percentage points weaker than forecast in March
  • inflation to average 3.6% in 2024, 2.8 percentage points higher than forecast in March, and to more gradually return to the 2% target in 2025
  • markets expect Bank Rate to settle at 4% by the end of the forecast, up from 3% assumed in the March forecast
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