Pantheon Macroeconomics

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U.K. Publications

Below is a list of our U.K. Publications for the last 6 months. If you are looking for reports older than 6 months please email, or contact your account rep

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2 Dec 2022 UK Monitor Price and Wage Data are Aligning for a Smaller MPC Rate Hike this Month

The slowdown in the pace of core price rises in the Eurozone in November is a good omen for the U.K.

Inflation expectations among households and businesses are falling, now that a recession is taking hold.

Manufacturers’ and retailers’ excess inventory reinforces the case for expecting goods inflation to drop.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. S&P Global/CIPS Manufacturing Survey, November 2022

  • In one line: The manufacturing sector likely is in recession.

Gabriella DickensU.K.

UK Datanote: U.K. Nationwide House Prices, November 2022

  • In one line: House prices fall for the second month in a row. 

Gabriella DickensU.K.

1 Dec 2022 UK Monitor Brexit Damage Still Very Visible in the U.K.'s Trade Data

The U.K. continued to run a very large trade deficit in Q3, largely due to the surge in natural gas prices.

The evidence that Brexit is disrupting U.K. trade, meanwhile, is mounting, particularly in the services data.

These two factors mean the trade deficit is on course to be the largest since the 70s this year.

Gabriella DickensU.K.

30 Nov 2022 UK Monitor Escalating Debt Repayments Point to a Full-Blown Recession

Households are saving more than usual, taking on less credit, and increasing ad-hoc mortgage repayments.

Firms also are choosing to delever; October’s net repayment of external finance was the second largest ever.

House purchase mortgage approvals fell sharply in October; we expect them to fall further this winter.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Money & Credit, October 2022

  • In one line: Still no sign of households using savings to support their real expenditure.

Gabriella DickensU.K.

UK Datanote: U.K. CBI Distributive Trades Survey, November

  • In one line: Consumers are tightening their belts, despite the additional government support to incomes. 

Gabriella DickensU.K.

29 Nov 2022 UK Monitor House Prices have Scope to Rebound in the mid-2020s

Incoming data are consistent with our forecast for a sharp fall in house purchases and an 8% drop in prices.

The MPC, however, won’t keep Bank Rate at 4% indefinitely; house prices should rebound in the mid-2020s.

Mortgage payments’ share of incomes will not return to 2010s levels; hefty rent rises have raised the floor.

Samuel Tombs (UK Economist)U.K.

28 Nov 2022 UK Monitor Sterling is Not Out of the Woods Yet

Sterling's rally has been driven by the elimination of the fiscal risk premium, which we doubt will return... 

...But the current account deficit will remain large next year, despite the recession, leaving sterling vulnerable. 

The MPC likely will hold back from raising Bank Rate as far as markets expect; we look for $1.15 in the spring. 

Samuel Tombs (UK Economist)U.K.

25 Nov 2022 UK Monitor Why Do We Expect Unemployment to Rise Sooner than Official Forecasters?

Past recessions show a much shorter lag between falling GDP and employment than the OBR and BoE now expect.

Vacancy data likely provide false comfort; they didn't forewarn of declining employment in early 2008.

Survey measures of employment have fallen sharply; the big corporate financing shock points to layoffs.

Gabriella DickensU.K.

November 2022 - U.K. Chartbook

Monetary And Fiscal Headwinds Look Set To Be Intense....Expect A 2% Peak-To-Trough Fall In GDP And No Revival Until 2024

Samuel Tombs (UK Economist)U.K.

24 Nov 2022 UK Monitor PMI Data Still Point to a Recession and Intense Price Pressures

  • S&P's survey points to another 0.2% q/q drop in GDP in Q4 and the likelihood of a faster decline in Q1.
  • The employment index remained slightly above its long-run average, but it tends to lag the PMI.
  • Output prices still are rising too fast for the MPC to tolerate, but leading indicators point to a slowing soon.

Gabriella DickensU.K.

UK Datanote: U.K. Flash PMIs, November 2022

  • In one line: Still consistent with a recession.

Gabriella DickensU.K.

23 Nov 2022 UK Monitor The Chances of Public Borrowing Falling Below 3% of GDP are Remote

  • Borrowing undershot the consensus in October due to the timing and under-recording of energy support.
  • The OBR's GDP forecasts assume an implausibly low saving rate and too rapid productivity growth...
  • ...Plans for very tight public spending won't be stuck to; borrowing eventually will settle at about 4% of GDP.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Public Finances, October 2022

  • In one line: Cost of energy price support will be greater in future months.

Samuel Tombs (UK Economist)U.K.

22 Nov 2022 UK Monitor The Stabilisation of Retail Sales in Q4 will Prove to be a False Dawn

  • Retail sales might hold steady in Q4, given the boost to disposable incomes from reversing the NI hike...
  • ...But they likely will fall again in 2023, as real incomes are hit hard by the rapid withdrawal of fiscal support.
  • A risk premium no longer is priced-in to gilts and sterling, but new strains might emerge if energy prices surge.

Gabriella DickensU.K.

21 Nov 2022 UK Monitor Is the Outlook for Households Really as Bad as the OBR Thinks?

  • The OBR's forecast for the effective mortgage rate looks
    implausibly high; we expect a smaller drop in RHDI...
  • ...But its forecast for the saving rate to fall to a joint-record low, supporting spending, jars with past experience.
  • The saving rate usually rises when the unemployment rate increases; rising rates will spur debt repayments.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Retail Sales, October 2022

  • In one line: The rise in sales in October will prove a false dawn

Gabriella DickensU.K.

18 Nov 2022 UK Monitor The Cliff-Edge in Energy Price Support Next Year will Aggravate the Recession

  • Most of the spending cuts and tax rises announced by Mr. Hunt do not kick-in until after the next election...
  • ...But the rapid withdrawal of energy price support next year will ensure that the economy remains in recession.
  • Mr. Hunt has less fiscal headroom than his predecessors; further adverse shocks will be met with extra cuts.

Samuel Tombs (UK Economist)U.K.

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U.K. Document Vault, Pantheon Macro, Pantheon Macroeconomics, independent macro research, independent research, ian shepherdson, economic intelligence