Economic Commentary April 2026

Our economic commentary provides a regular update on global, UK, and Scottish economic trends, drawing on recent economic data as well as feedback from businesses.

The methodology consisted of desk research.

• Global business activity eased to an 11-month low in March as output eased across services and manufacturing. PMI data pointed to a slowdown in business activity across major economies, including the Eurozone, UK, US and Japan.
• Business activity rose in nine out of twelve UK nations/regions in January, an increase from five in December. Note this was prior to the Middle East conflict when data reflected stronger demand for goods and services as confidence improved across most areas.
• UK consumer price inflation was 3.0% in the year to February, unchanged from the 12 months to January.
• The Scottish economy grew by 0.5% in January, after showing no growth (0.0%) in December. Output grew in the production (+1.2%), construction (+0.2%) and services (+0.4%) sectors.
• Scottish businesses report a range of factors impacting supply chains, including international conflict, alongside shipping disruption, cyber-attacks and increased barriers to trade. Energy prices are also a key issue, with 76% of businesses very or somewhat concerned.
• Scotland’s labour market continues to cool as the number of payrolled employees decreased by 5,000 (-0.6%) over the year to February (the sixteenth consecutive monthly fall).
• Overall sentiment among SE customers is mixed and fragile – some sectors (for example, financial services) are more positive than others (for example, energy).
• The UK outlook has weakened as GDP growth for 2026 was downgraded to 0.7% (from 1.2%), and consumer price inflation is now expected to average 4.0% in 2026, a significant upward revision.

The paper makes no recommendations.