Scottish economic bulletin: April 2024

Inflation

Inflation fell to 3.4% in February, its lowest rate since September 2021.

• The inflation rate fell to 3.4% in February, down from 4% in January, and is at its lowest rate since September 2021 as inflationary pressures continue to stabilise.^[2]
• The largest downward contributions to the monthly change in the annual inflation rate came from food and restaurants and cafes. The inflation rate for food fell for its eleventh consecutive month in February to 5% (down from 7% in January) while the inflation rate in restaurants and cafes fell to 6.7% (down from 8.2% in January). The largest upward contribution came from housing and household services in which the annual inflation rate rose from -2.1% to -1.7% while motor fuels also provided an upward contribution with the annual rate rising from -9.2% to -6.5%.

  

• Core inflation, which excludes energy, food, alcohol, and tobacco, fell in February to 4.5% and continues to partly reflect the current persistence of services prices inflation which fell from 6.5% to 6.1% while goods prices inflation fell from 1.8% to 1.1%.
• In response to recent inflation and wider economic data, the Bank of England’s Monetary Policy Committee (MPC) maintained the Bank Rate at 5.25% in March, unchanged since August 2023. The Bank set out that further evidence on areas of inflation persistence, such as in the services sector and the pace of wage growth, was required before changing the current monetary policy position.^[3]