Understanding the Cost of Living Crisis in Scotland

7. Conclusion

Over the course of 2024 inflation has stabilised around the Bank of England’s 2% target. The Bank’s latest forecast^[125] is for the inflation rate to rise to 2.8% in 2025 before gradually easing back towards 2% in 2027.

Many low income households are likely to continue to struggle as we progress into 2025. Anecdotal evidence from debt advice services suggests that they typically see their highest levels of demand in the first quarter of the calendar year.

Looking ahead, it will be important to continue to monitor the costs of living for different groups. There are significant global geo-political risks that could generate further inflationary pressures, while there also remains uncertainty around the UK fiscal outlook.

Polling shows that the cost of living crisis remains high in the public consciousness and is an issue of significant and continued concern. For many people (particularly low income households) it doesn’t feel like things are getting better.

The longer term effects of the cost of living crisis continue to present serious economic and social challenges for Scotland. The crisis has left a legacy of higher household debt, public and third sector services under significant strain, increased inequality and poorer mental and physical health.

The cost of living crisis has affected particular households, services and sectors of the economy very differently and further action will be required to support those people and sectors most negatively affected.

Many of the interventions prioritised during the crisis focused on providing short term and immediate support to households and businesses. It is unlikely that this will be the last cost of living crisis Scotland faces. There is strong evidence regarding how a range of groups have been differentially affected, and this evidence should inform the design and delivery of any future policy responses. Improving Scotland’s future resilience should build on existing action to include longer term measures to reduce energy consumption, support more sustainable sources of energy and improve households’ financial ability to withstand future economic shocks.

How to access background or source data

The data collected for this social research publication:

☐ are available in more detail through Scottish Neighbourhood Statistics

☐ are available via an alternative route

☐ may be made available on request, subject to consideration of legal and ethical factors.

☐ cannot be made available by Scottish Government for further analysis as Scottish Government is not the data controller.