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 info@pantheonmacro.com, or contact your account rep

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22 Sept 2021 The OBR Likely Won't Gift Mr. Sunak Much Rosier Economic Forecasts

Public borrowing in August was only slightly below the OBR's forecast; interest payments are picking up.
We think the OBR will revise its long-term "scarring" estimate only to 2.5%, from 3.0% previously...
...The workforce has continued to contract this year, confounding the OBR's hopes of a rebound.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. CBI Industrial Trends Survey, September 2021

  • In one line: Overstating the pace of the recovery in production. 

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Public Finances, August 2021

  • In one line: The inflation outlook implies August won’t be the last month of high interest payments.

Samuel Tombs (UK Economist)U.K.

21 Sept 2021 Households will be Hurt by Q4's 1.5% Drop in Disposable Income

  • August's drop in retail sales was broad-based; the recovery in overall spending now is sluggish.
  • Real disposable income will drop by 1.5% q/q in Q4, as employment falls, inflation soars, and benefits are cut.
  • RHDI will recover in Q1, but then flatline in Q2, in response to the rise in employees' NICs rates.

Samuel Tombs (UK Economist)U.K.

20 Sept 2021 Don't Expect a Hawkish Pivot from the MPC This Week

Markets now expect the MPC to raise Bank Rate twice next year, with the first hike as soon as February.

The MPC, however, will focus on labour market slack and the prospects for its elimination, not just inflation.

The recovery has faded, implying many furloughed staff will be underemployed in Q4; the MPC needn't rush.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Retail Sales, August 2021

  • In one line: Drop should fuel doubts about how soon the MPC will hike interest rates.

Samuel Tombs (UK Economist)U.K.

17 Sept 2021 House Prices Should Recover Steadily in 2022 after Q4's Fall

  • Year-over-year growth in house prices slowed in July, following the tapering of government support.
  • Expect a further slowdown in Q4, when the SDLT threshold will return to £125K and real incomes will fall.
  • The outlook for 2022, however, is brighter; falling mortgage rates and tight supply will support prices.

Samuel Tombs (UK Economist)U.K.

16 Sept 2021 Higher CPI Inflation Still Due to Only a Few Components

  • The month-to-month rise in the core CPI in August was only 0.1pp bigger than the average in the 2010s.
  • Used cars and computer games drove the large monthly gain; no sign of broad-based price increases.
  • Higher energy prices will push up the headline rate to 4% in Q4 and Q1, but the MPC needn't blink.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Consumer Prices, August 2021

  • In one line: Used car prices to blame for the upside surprise; little near-term momentum in the rest of the core basket. 

Samuel Tombs (UK Economist)U.K.

15 Sept 2021 Wages Likely Won't Match Inflation as Slack Builds Post-Furlough

  • Payroll employee numbers returned in August to their pre-Covid peak, but will dip in Q4, after furlough ends.
  • We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; slack within firms will build too.
  • Three-month-on-three-month annualised growth in wages fell to 3.2% in July; slack will keep it in check.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Labour Market Data, July & August 2021

  • In one line: Not yet tight enough for strong underlying wage growth; slack to increase in Q4.

Samuel Tombs (UK Economist)U.K.

14 Sept 2021 The Consensus for August CPI Inflation Looks too Low

  • We think CPI inflation leapt to 3.1% in August, from 2.0% in July, above the 2.9% consensus.
  • Core inflation likely jumped on the anniversary of the Eat Out to Help Out Scheme...
  • ...But it also probably was boosted by abnormally large increases in used car and other goods prices.

Samuel Tombs (UK Economist)U.K.

13 Sept 2021 Covid Put the Brakes on July GDP; Expect a Lingering Drag This Year

  • Surging Covid-19 cases largely were responsible for the near-stagnation of GDP in July.
  • The virus no longer is driving labour shortages, but many remain fearful and will spend less if it picks up.
  • We still look for quarter-on-quarter growth in 1.5% in Q3, half the rate expected by the MPC.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. International Trade, July 2021

  • In one line: U.K. trade still failing to benefit from global upswing. 

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. GDP July 2021

  • In one line: Stagnation due largely to resurgent Covid; timelier data point to a renewed recovery in August.

Samuel Tombs (UK Economist)U.K.

10 Sept 2021 Hidden Slack will Rise More than the Unemployment Rate, Post-Furlough

  • The number of workers on furlough decreased again in July, as government contributions were tapered...
  • ...But usage remains high in sectors that already have fully recovered, and among financially-weak SMEs.
  • We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; hidden slack will rise much more.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. RICS Residential Market Survey, August 2021

  • In one line: Rotation, not stagnation, to blame for slower growth in sales.

Samuel Tombs (UK Economist)U.K.

9 Sept 2021 What Does the Latest Surge in Energy Prices Mean for CPI Inflation?

  • The MPC's energy price assumptions for its inflation forecast are too high in the near-term, and for 2023.
  • Wholesale electricity and natural gas price changes don't immediately impact the CPI...
  • ...Future prices still imply that Ofgem will lower slightly the default tariff cap next year, not raise it further.

Samuel Tombs (UK Economist)U.K.

8 Sept 2021 The MPC Won't Hike Bank Rate Just After a Big Rise in NICs

  • Markets still expect the MPC to hike rates in Q2 2022, despite surprise plans to lift national insurance in April.
  • The tax hike will defer a full recovery in households' spending to the second half of next year.
  • The plans imply the Treasury does not expect the OBR to turn upbeat on the medium-term economic outlook.

Samuel Tombs (UK Economist)U.K.

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