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
Please use the filters on the right to search for a specific date or topic.
Chartbook Daily Monitor Rob Wood (Chief UK Economist)
- Focus on solid services inflation rather than weaker- than-expected headline inflation.
- The headline inflation miss is smaller than it looks and producer prices point to goods weakness reversing.
- Underlying services inflation is slowing only gradually and remains consistent with above target inflation.
- We expect CPI inflation to increase to 3.0% in May, from 2.8% in April.
- Airfares will recover, and last year’s vehicle-duty correction will boost recorded inflation.
- Motor fuel prices have peaked, but utility and food bills will push inflation to a peak of 3.6% in November.
GROWTH WOBBLES WHILE INFLATION JUMPS...
- …THE MPC WILL HOLD RATES AS LONG AS IT CAN
- Increased political uncertainty and high energy costs weighed on business sentiment in May.
- But the PMI overreacts to political noise, and price pressures remain strong.
- We stick to our July rate-hike forecast, but it’s a much closer call as downside risks to growth rise.
- Some frozen government-set prices, a utility-bill cut and the early Easter combined to lower inflation.
- We think that most—not all—of the downside inflation surprise in April, such as in airfares, will unwind.
- Weaker underlying inflation lowers the chance of a rate hike, but surveys still point to a sharp acceleration.
- The sharp fall in payrolls in April looks misleading, as they are far weaker than surveys suggested.
- Payroll revisions remain predictable, and April should eventually show jobs little changed month-to-month.
- Falling jobs and dovish pay growth will keep the MPC on hold in June, but we expect wage gains to improve.
- Betting markets give Sir Keir Starmer only 15% chance of being Prime Minister after September.
- So, rates markets have likely mostly priced in the impact of the Labour Party leadership changing.
- We estimate 10-year yields would rise another 7-to-10bp should Mr. Burnham win a leadership contest.
- Some of March’s strong GDP gain was front-running ahead of supply-chain disruption...
- …But our measure of underlying activity grew solidly too, suggesting genuine strength.
- We now expect quarter-to-quarter GDP growth of 0.2% in Q2, up from 0.1% previously.
- We now expect CPI inflation to drop to 3.0% in April from 3.3% in March, in line with the MPC’s call.
- But our forecast is close to rounding down to 2.9%, and uncertainty is high, with many price resets.
- Smaller water-bill and vehicle-tax hikes than in 2025 will slow inflation, but rents will rise by more this April.
- We expect CPI inflation to slow to 2.9% in April from 3.3% in March.
- Utility prices fell 6.6% in April, and a range of government-set prices will rise less than a year earlier.
- Our CPI inflation call is 0.1pp lower than rate-setters expect, but we match their services inflation forecast.
- MPC members argued that tighter financial conditions were doing the job of rate hikes for now.
- The Market Participants Survey in particular appears to have been influential in Governor Bailey’s view.
- But the MaPS suggests the MPC will have to hike this summer to maintain financial conditions.
GROWTH HOLDS UP WHILE INFLATION JUMPS...
- …SO WE EXPECT AN MPC RATE HIKE IN JUNE
- The MPC’s decision to hold rates, and the vote split, were in line with consensus.
- The MPC’s guidance suggests to us a couple of rate hikes this year, fewer than the market had priced.
- Mr. Bailey’s communication in the press conference jarred with MPC scenarios, so we detail our take.
- Household inflation expectations eased—although were still high—in April, according to YouGov.
- But we think the MPC can take limited comfort, because expectations still look de-anchored.
- Consumers are more attentive to inflation now than before 2022, raising risks of second-round effects.
- We expect the MPC to vote nine-to-zero to hold Bank Rate, with risks of one or two votes for a cut.
- The MPC is likely to keep its guidance little changed, emphasising that it stands ready to act if needed.
- We expect the MPC to raise its 2026 inflation forecast but cut the two-year ahead number to 1.9%.
- Rocketing motor-fuel prices, driven by oil-price rises, pushed inflation up to 3.3% in March.
- Core inflation slid by 10bp, but the mix of inflation was hawkish, in our view.
- Underlying services prices rose the most three-months-on-three-months in almost a year.
- Payrolls were stable in March, despite the Iran war, once we adjust for likely revisions.
- Unemployment corrected for last August’s volatile rise and suggests the MPC was too pessimistic.
- Slowing pay growth was dovish, but PAYE median pay and surveys suggest the official data have undershot.
- February GDP exaggerates the growth trend, because of erratic gains in a number of sectors.
- But growth was surprisingly strong even if we strip out the noise; the economy was recovering.
- We now look for quarter-to-quarter GDP growth of 0.5% in Q1, and 0.0% in Q2.
- We expect CPI inflation to accelerate to 3.3% in March from 3.0% in February.
- Services inflation should hold at 4.3%, as the early-Easter airfares boost is offset by weaker hotel prices.
- Lower oil prices mean we are close to removing our call for the MPC to hike Bank Rate once this year.
IRAN WAR RAISES INFLATION AND CUTS GROWTH...
- …MPC WILL HAVE TO STAY ON HOLD
