28th June 2026
The Fraser of Allander Institute’s recent analysis argues that the Scottish and wider UK economies have shown remarkable resilience despite global uncertainty. That view is not an outlier. A growing body of independent evidence — from central banks to international institutions and business surveys — supports the idea that the economy has held up better than many expected over the past year.
Several major forecasters have revised their outlooks upward, pointing to stabilising growth, falling inflation, and a labour market that remains historically strong. While challenges remain, the broader economic narrative is shifting from one of fragility to one of cautious recovery.
The Bank of England has repeatedly noted that the UK economy is performing “better than expected,” with GDP growth modest but positive and inflation falling faster than forecast. Its Monetary Policy Reports highlight improving business sentiment and a labour market that, while cooling, remains robust by international standards. This aligns closely with the Fraser of Allander Institute’s view that underlying economic fundamentals are stronger than headlines often suggest.
The Office for Budget Responsibility (OBR) offers a similar message. While it does not paint an upbeat picture, it emphasises that the UK avoided the deep recession many predicted in 2023. The OBR describes the current environment as one of stagnation rather than contraction, with real wages returning to growth and employment levels remaining high. In other words, the economy is weak but stable — a form of resilience in itself.
Independent think tanks echo this sentiment. The National Institute of Economic and Social Research (NIESR) describes the UK as “flat but stable,” forecasting modest growth through 2024–25. NIESR points to falling inflation, improving consumer confidence, and stabilising business investment as signs that the worst of the economic turbulence may be behind us.
International bodies reinforce this picture. The International Monetary Fund (IMF) has upgraded the UK’s growth forecasts multiple times, noting that the economy has “shown resilience” in the face of global shocks. The IMF highlights the strength of the UK’s financial system and the gradual easing of inflationary pressures as reasons for cautious optimism.
Business surveys provide some of the clearest real‑time evidence of resilience. The CBI, British Chambers of Commerce, and S&P Global/CIPS PMI all report improving sentiment across manufacturing and services. The UK’s composite PMI has returned to growth territory in several recent months, driven by a strong services sector and stabilising export expectations. These forward‑looking indicators often detect turning points before official data does.
For Scotland specifically, the picture is similarly encouraging. The Scottish Fiscal Commission forecasts modest but positive growth, supported by strong labour market participation and resilient consumer spending. The Royal Bank of Scotland PMI shows Scotland outperforming several UK regions, with business activity stabilising and employment remaining strong. Even the Scottish Government’s own economic briefings highlight falling inflation and improving business confidence across key sectors.
Taken together, these sources build a consistent narrative:
the economy is not booming, but it is proving far more resilient than many predicted. Growth is modest, inflation is easing, and business sentiment is improving. Risks remain — from global instability to domestic fiscal pressures — but the foundations for recovery are firmer than they appeared a year ago.
This broader evidence base strengthens the Fraser of Allander Institute’s argument. Far from being an isolated optimistic voice, it reflects a growing consensus that the UK and Scottish economies are navigating global uncertainty with more stability and adaptability than expected.