In the three months to May, GDP is estimated to have grown by 0.9% compared to the previous three month period. This indicates an increase relative to the growth of 0.5% in 2024 the first quarter (January to March).

Jill Mackay, savings specialist at Scottish Friendly, comments on today’s Scottish GDP figures: “The Scottish economy is keeping pace with the wider UK benchmark at the moment over three months, which is positive given the better than expected UK GDP figures. For the month of May it lagged UK GDP by just 0.1%.

“Despite this slight lag, the three-month growth of 0.9% reinforces the view that rate cuts could be less forthcoming than markets expect, which would be disappointing for Scottish households with significant mortgage pressures.”

Output in the services sector, which accounts for around three quarters of the economy, grew by 0.6% in May. Output in the production sector is estimated to have contracted by ‑2.2% in May. The largest contribution to overall GDP came from contraction in the output of Electricity & Gas Supply.

Ms Mackay continued: “Bringing down inflation has been the main priority up until now, but the Monetary Policy Committee (MPC) will be watching economic activity closely.

“A cut tomorrow would be a timely benefit for households facing high mortgage costs, but Scottish savers may need to seriously consider the next steps for their long-term savings as rates start to fall.

“These GDP figures reinforce earlier UK-wide numbers that suggest a cut might not be on the cards quite so soon. With the economy tolerating higher rates, the MPC might continue its ‘wait and see’ approach. The remainder of 2024 could be a crucial period for setting the long-term outlook for the Scottish economy and the financial prospect of Scottish households.”