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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Chartbook Daily Monitor Rob Wood (Chief UK Economist)
- The BRC Shop Price Index showed goods inflation hitting a near two-year high in January.
- Strength was widespread and pushes up our January CPI inflation forecast to 3.1%, from 3.0% before.
- We treat the BRC with some caution, yet it carries a warning that inflation pressures may remain elevated.
- Retail sales growth month-to-month was flattered by jewellery sales and seasonals in December.
- But revisions mean sales increased by a solid 2.7% month-to-month annualised over 2024-to-25.
- Rising major purchase intentions and younger people’s confidence bode well for the outlook.
- Tobacco duty and a jump in airfares drove up CPI inflation to 3.4% in December, a touch above our call.
- We note a few obvious erratic factors, with a January airfares correction likely balanced by solid hotel prices.
- Inflation gives rate-setters little reason to rush to cut next month, but we see a final rate reduction in April.
- Yesterday’s labour-market headlines were dovish, with payrolls falling and wage growth slowing.
- But payrolls look implausibly weak relative to surveys, while job vacancies point to stable labour demand.
- Compositional effects flatter the pay slowing in 2025, while PAYE points to a large AWE jump in December.
- We estimate that slowing net immigration since 2023 has cut the payroll run-rate by about 20K per month.
- Net immigration fell sharply to 205K in the year to June 2025, from a 944K peak in March 2023.
- Tighter visa rules, such as higher salary thresholds, have driven much of the immigration slowdown.
- Tobacco-duty hikes and a seasonal boost to travel prices should raise CPI inflation to 3.3% in December.
- We would forecast 3.4% inflation if the CPI collection date were December 16, instead of 9, as we assume.
- Airfares inflation would be 24pp higher than we assume if the CPI were collected on December 16.
- We expect CPI inflation to tick up to 3.3% in December, from 3.2%, as tobacco duties rise.
- A later CPI collection date than we assume would tip our forecast to 3.4% via higher airfares inflation.
- Strong BRC Shop Prices for clothes in December pose an upside risk to our forecast.
- Look past the disappointing headline PMI for December; forward-looking balances improved.
- The Q4 PMI is consistent with 0.0-to-0.2% growth, but new orders point to an improvement in January.
- Price pressures remain stubborn despite weak jobs, which will keep the MPC cautious.
GROWTH AND INFLATION RISKS SHIFT DOWN...
- …BUT WE STILL THINK INFLATION WILL PROVE STICKY
- An MPC interest rate cut today is beyond doubt after inflation undershot the MPC’s forecast by 20bp.
- We add an April rate cut to our forecast too, although that is a finely balanced call still…
- ...Because underlying inflation pressure remains much firmer than the headline inflation drop suggests.
- Chaos running up to the November Budget hit hiring, but by less than payrolls suggest.
- Payrolls will be revised better, vacancies are rising, and jobless claims are down on a year earlier.
- The MPC has enough evidence to cut on Thursday, but stubborn pay growth will keep it cautious.
- A food-price drop and tobacco-duty base effects should lower CPI inflation to 3.5% in November.
- We are tracking a chunky hotel-price rise, while a large airfares base effect will drop out of the figures...
- …So, we look for CPI services inflation to increase to 4.7% in November, from 4.5% in October.
- We expect the MPC to vote five-to-four to cut Bank Rate at its meeting on December 18.
- Hawks will likely note supply-side weakness, and that the Budget raises medium-term inflation a little.
- The MPC will need to change its guidance for gradual further cuts as it approaches neutral.
- We expect ‘final’ payrolls to fall by 13K month-to-month in November, as Budget worries hit jobs.
- The headline LFS unemployment rate will hold at 5.0% in October, as August’s single-month rise corrects.
- Pay growth to slow in October, but wage gains look set to stabilise over the coming 12 months.
- We expect CPI inflation to drop to 3.5% in November, from 3.6% in October.
- A month-to-month fall in food prices and base effects from duty hikes in 2024 will drag inflation lower.
- Our forecast for headline CPI inflation in November sees it 10bp higher than the MPC expects.
- Collapsing job growth in the November DMP survey leaves a December rate cut nailed on.
- But the DMP was sampled at the height of Budget chaos so will likely improve in December.
- The DMP shows wage and price disinflation is over for now, so the MPC will still have to be cautious.
- Our models indicate that the PMI is consistent with quarter-to-quarter GDP growth of just 0.1% in Q4.
- But the upward revision from the flash PMI suggests sentiment improved as the Budget became clearer.
- So, we see a decent chance of the PMI improving further in December.
- We expect manufacturing output to rebound in October, as car factories reopened after a cyber attack.
- Growth in consumer-facing services will ease as pre-Budget worries creep into activity.
- Underlying economic activity is still holding up close to trend, so spare capacity is emerging only slowly.
- Consumers added to their savings and took on less credit in October, as the Budget approached.
- Bank lending to firms continues to rise year-over-year, but net external finance raised by PNFCs dropped.
- The housing-market data remain solid; mortgage approvals eased only slightly and transactions rose.
- A tax-and-spend budget that delayed fiscal consolidation will struggle to drive a sustained gilt rally.
- Measures to cut CPI inflation by 50bp in mid-2026 leave a December rate cut nailed on…
- …but the Budget will boost the MPC’s inflation forecasts fractionally from 2027.
