UK Publications
Below is a list of our UK Publications for the last 5 months. If you are looking for reports older than 5 months please email info@pantheonmacro.com, or contact your account rep
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Elliott Laidman Doak (Senior UK Economist)
- The housing market was solid before the energy price shock, but activity will grind lower in 2026.
- Measures of supply are ticking up, which will put further pressure on prices.
- We look for house price inflation of 1.0% in Q4 2026, down from our previous forecast of 3.0%.
- Unrevised GDP growth of 0.1% quarter-to-quarter in Q4 2025 confirms the pre-Budget hit to activity.
- The saving rate rose to 9.9% in Q4, from 9.1% in Q3, showing consumers can smooth spending in 2026.
- The current account deficit widened in Q4 and will remain weak in 2026 as energy prices jump.
- Healthy credit flows and stable saving patterns suggest confident consumers.
- The activity data will slow in the coming months, but consumers can use savings to smooth spending.
- Business lending was rising, on the back of lower policy uncertainty and expectations of rate cuts.
- Guarded language from the MPC suggests some pushback against market pricing of three hikes in 2026.
- But rate-setters must be wary, given de-anchored inflation expectations and low trust in the central bank.
- The Spring Statement outlines high levels of issuance, which will continue to push up the neutral rate.
- Headline inflation was unchanged at 3.0% in February, as a rise in core CPI offset weaker services inflation.
- Services inflation above the MPC’s forecast will leave rate-setters more worried about second-round effects…
- Inflation will trough at 2.8% in April before rising back up to 3.7% in November.
- The PMI points to GDP growth easing in Q1, but still broadly in line with rate-setters’ expectations.
- We stick with our forecast for GDP to rise by 0.2% in Q1, but with downside risks to that call.
- The MPC will wait for more data before making judgements on how the war is impacting the economy.
- In one line: War in the Middle East will hit sentiment in the manufacturing sector hard.
- We expect the data flow to soften as the implications of the war in Iran feed into surveys.
- But the PMI held up for two months after Russia’s invasion in 2022; the housing market will react faster.
- The MPC’s focus on spare capacity means the job data will be crucial for forecasting the path for rates.
- Erratic falls in equipment manufacturing and mining kept GDP unchanged month-to-month in January.
- We lower our forecast for quarter-to-quarter GDP growth in Q1 to 0.2%, from 0.3% previously.
- War in Iran is a serious downside risk to activity, but we expect slower growth rather than a sudden stop.
- In one line: Households thought weaker inflation trends would be only temporary, and expectations will jump sharply now energy prices have surged.
HOUSE PRICE INFLATION DIPS IN DECEMBER...
- ...BUT ACTIVITY IS ALREADY PICKING UP IN Q1
- Industrial production likely rebounded in January, since manufacturing activity continues to recover.
- Surging A&E attendances indicate upside risk to services output from healthcare activity.
- Output in the construction sector will fall again, as the wet weather dampened activity.
- House prices rose by a respectable 2.4% on average in Q4, down only slightly from 2.5% in Q4 2026.
- 2025’s stamp-duty hike and mansion tax are weighing on house prices in London and the South East.
- A sharp drop in household inflation expectations in February seals a March rate cut.
- The latest public finances data will support the Chancellor by showing borrowing below profile.
- But the headline figures flatter the overall picture, where spending pressures are higher.
- We expect the OBR to revise down borrowing in 2030/31 slightly, though policy U-turns are mounting.
- A surge in retail sales growth in January points to upside risk to GDP growth in Q1.
- The PMI suggests that business sentiment is also improving as policy uncertainty wanes.
- But the dismal weather so far this year means we hold fire on raising our Q1 growth forecast from 0.3%.
- A jump in payroll-measured productivity has coincided with the proliferation of AI tools.
- Studies link AI exposure and weak hiring in some sectors, but the impact is tiny at a macro level, so far.
- The impact of AI will build over time, but the general equilibrium effects on the economy are hard to call.
- Insolvencies fell year-over-year in January despite months of political chaos causing weaker growth.
- Retail insolvencies have risen, likely as 2025’s payroll-tax and minimum-wage hikes hit the sector hard.
- But overall business failures should drop a little in 2026, as growth recovers and borrowing costs fall.
HOUSE PRICE INFLATION JUMPS IN NOVEMBER...
- ...AND BUYER DEMAND HAS FURTHER TO IMPROVE IN 2026
- Issuance changes, a drop in the fiscal risk premium and weaker data pushed down yields from November.
- But the gilt-market rally is reversing as political risk rises and the market prices fewer cuts from the MPC.
- We expect 10-year and 30-year yields to rise to a 2026 high of 4.60% and 5.40%, respectively, in Q3.
- Mining output likely rose sharply in December as Brent and Forties loadings surged…
- ...but falling manufacturing activity and energy supply output will drag on GDP growth.
- We expect quarter-to-quarter GDP growth in Q4 of 0.1%, but it could tip to 0.2%.
