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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Daily Monitor Chartbook Rob Wood (Chief UK Economist)
- We expect the MPC to vote 7-to-2 vote to keep Bank Rate on hold at next week’s policy meeting.
- Rate setters are focused on inflation which is proving persistent, while job falls should ease.
- We look for rate setters to slow QT to £70B a year from October, with sales skewed to shorter durations.
- We expect CPI inflation to nudge up to 3.9% in August from 3.8% in July, but only just on the rounding.
- Stronger food, motor fuel and hotel prices—boosted by an Oasis concert—should offset weaker airfares.
- We expect CPI inflation to peak at 4.1% in September, up from 4.0% previously, above the MPC’s 4.0% call.
- Gilt yields have soared, as yields have risen globally and the markets price in UK fiscal risk.
- Elevated inflation expectations partly explain why UK yields have reached their highest since 1998.
- We think market-based expectations are being suppressed by the RPI-CPI transition in 2030.
SOLID GROWTH AND STICKY INFLATION...
- …THE MPC WILL HOLD BANK RATE FOR THE REST OF 2025
- We expect CPI inflation to hold at 3.8% in August, as a jump in food prices offsets a correction in airfares.
- We see upside risk to our call after strong flash Eurozone food CPI inflation.
- Gilts suffer from a global sell-off and UK-specific risks; Ms. Reeves needs to aim for proper fiscal headroom.
- GDP growth beat consensus again in Q2, and surveys point to improving momentum so far in Q3.
- Services inflation is proving sticky, as wage growth remains far too strong to deliver 2% inflation.
- Job surveys were weaker than we expected but continue to point to payroll falls easing.
- The MPC cut by 25bp but was much more hawkish, with a tighter-than-expected 5-to-4 vote in favour.
- The MPC added more cautious guidance, lifted its inflation forecasts and said upside risks had risen.
- So, we maintain our forecast for no more rate cuts this year, which the market moved closer to pricing.
- We expect CPI inflation to rise to 3.7% in July from 3.6% in June, as motor fuels and airfares rise.
- CPI collected close to school vacations should boost travel prices, while domestic hotel prices likely rose.
- We expect inflation to peak at 4.0% in September and still be at 3.7% in December.
- We expect CPI inflation to rise to 3.7% in July from 3.6% in June, as motor fuel prices increase.
- We see upside risk to our goods price call after strong BRC Shop Price inflation and flash Eurozone CPI.
- We now expect inflation to peak at 4.0% in September, up from 3.8% previously, as food price inflation rises.
- Our central Bank Rate forecast is hawkish, assuming only one more cut this year and none next year.
- A probability-weighted average of three scenarios is more dovish but still above the market in 2026.
- Continued sharp payroll falls or easing inflation expectations would shift us to more dovish scenarios.
WEAK JOBS PUSHING THE MPC TO AN AUGUST CUT...
- We expect the MPC to cut Bank Rate by 25bp on August 7 in response to weak payrolls.
- We expect two votes for a 50bp reduction, four for a 25bp cut and three for no change.
- The MPC will likely maintain “gradual and careful” guidance, but may need to mention neutral.
- Vacancies are one of the least accurate leading indicators of near-term job growth.
- Moreover, high-frequency data suggest that vacancies have stabilised...
- ...In part as small firms’ hiring intentions recover sharply from payroll-tax-hike-induced falls in April.
- We estimate that most of the fall in payrolls since October has been driven by payroll-tax hikes.
- 35K of the payroll drop likely reflects mismeasure-ment, as workers switch to self-employed status.
- Job growth should ease as firms complete their adjustment to the tax hikes.
- Sticky wage and price gains are being caused in part by falling MPC credibility.
- Household inflation expectations sit higher than their relationship with inflation implies, and are still rising.
- The UK is an outlier in Europe, where inflation expectations seem to have behaved much better.
- Surprise! Payrolls were revised to show jobs falling less than half as much this year as previously thought.
- The payrolls trend is improving, and surveys suggest job falls are ending, while pay growth is proving sticky.
- We reluctantly bring forward our rate-cut call to August, from November, but it’s a ‘one-and-done’.
- Food, a motor fuels base effect and unwinding clothes discounting drove up June CPI inflation to 3.6%.
- We think the inflation surprise represents genuine news rather than noise that will unwind in July.
- We raise our forecasts, now expecting CPI inflation to average 3.6% in H2, up from 3.5% previously.
- The ONS BICS survey is timely, samples seven times more firms than the PMI and covers all the economy.
- The BICS survey suggests stickier services inflation than the PMI and a stronger job recovery since April.
- US tariffs are having a small impact on the UK economy, with 78% of firms unaffected.
- We expect real household disposable income to grow by 2.0% in 2025 and 1.3% in 2026.
- Elevated inflation expectations will likely keep wage growth slowing only gradually.
- Our call for 1.5% year-over-year consumption growth over 2025-to-27 needs only a modest saving rate fall.
- The OBR has again deemed the public finances to be on an unsustainable trajectory.
- Climate-change mitigation and an ageing population will be costly for the exchequer.
- Lifting productivity growth is crucial for ensuring the debt burden remains manageable.
