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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Weekly Monitor Daily Monitor Rob Wood (Chief UK Economist)
- Volatility at the long end of the gilt curve will fail to deter the MPC from continuing QT from October.
- The level of reserves in the system is elevated, and rate-setters are keen to dispose of APF assets.
- We expect the BoE to reduce the pace of QT only modestly in 2025/26, to £80B per year.
- The MPC turned more dovish last week, just not as dramatically as the market expected.
- The US–UK trade deal will have a small impact on trade flows but could relieve some uncertainty.
- Strong GDP growth and upward payroll revisions should maintain the sense of monetary caution.
- We expect CPI inflation to jump to 3.6% in April, from 2.6%, matching the MPC’s February forecast.
- Ofgem’s utility price hike, a massive water-bill increase, tax hikes and indexed prices drive the rise.
- Inflation will likely stay above 3% until January, despite recent falls in oil and natural gas prices.
- Uncertainty hammered the PMI in April, suggesting a chance that UK GDP will fall in Q2.
- The MPC will retain some caution, however, as the PMI shows underlying inflation accelerating.
- Rate-setters can get away with a couple of precautionary rate cuts in May and June.
- We expect the MPC to cut Bank Rate by 25bp next week, with two members favouring a 50bp reduction.
- The MPC will likely judge that lower market expectations for Bank Rate are mostly warranted.
- High uncertainty will sap growth, and a new disinflationary scenario should support faster rate cuts.
- We expect the initial April payrolls estimate to show a fall of 30K month-to-month.
- LFS unemployment will likely tick up to 4.5% in March, and LFS employment should gain 166K.
- Pay growth remains strong; we expect private ex-bonus AWE to rise 0.3% month-to-month.
- The economy was growing solidly prior to tariffs, powered by consumers opening their wallets.
- Soft data are creaking, but they likely overstate economic weakness, the PMI in particular.
- A 50bp May rate cut is off the table, but we see a decent chance of 25bp reductions in May and June.
- A swathe of data on the labour market indicates that the job market is cooling, not cratering.
- But the balance of risks has shifted to a faster shake-out after President Trump’s tariffs.
- We expect the unemployment rate to rise to 5.1% in 2026 as the trade war dampens GDP growth.
- Mr. Trump’s tariffs and the resulting uncertainty have led the UK PMI to tank to its lowest since late 2022.
- Rising price pressures and the PMI’s overreaction to uncertainty mean the MPC will retain some caution.
- But downside growth risks mean we expect back-to-back, precautionary, rate cuts in May and June.
- Weaker-than-expected March inflation makes a May interest rate cut a racing certainty.
- Solid pre-tariff growth means we look for only three more 25bp Bank Rate cuts this year…
- …But downside risks allow earlier moves; we expect back-to-back ‘insurance’ cuts in May and June.
- A May rate cut is a racing certainty after CPI inflation undershot the MPC’s forecast in March.
- But underlying services inflation held steady at 4.5%, while tax hikes, government-set price increases…
- ...and unwinding erratic factors weighing on March inflation will still drive CPI inflation to 3.5% in April.
- Treat March’s huge payrolls drop with caution, it will very likely be revised up.
- Looking across the range of labour-market data, the picture remains one of gradual loosening.
- Pay growth remains far too high, but the hit to GDP growth from tariffs risks a faster job market easing.
- GDP growth soared in February as industrial production and services activity rose higher…
- …But the ongoing global trade war has made incoming data obsolete.
- The MPC will be challenged by a broken trading environment and CPI at 3.5% in H2.
- Multiplying ONS errors increasingly hint at systemic problems that could affect more data series.
- The saving rate has disconnected from its usual economic drivers, so it may have been mis-estimated.
- Household income based on unreliable official job data is particularly subject to risk of error, we think.
- Slow progress in implementing the Bernanke review leaves us pessimistic about the resulting changes.
- Sub-optimal communication means the MPC will need higher interest rates than otherwise.
- The rapidly evolving trade war means we see three further 25bp cuts to Bank Rate in 2025.
- We look for a 30K month-to-month fall in March payrolls, consistent with a 6k fall after revisions.
- The unemployment rate should tick up to 4.5% in February, from 4.4% in January.
- Pay growth remains sticky; we expect February private ex-bonus AWE to rise 0.3% month-to-month.
- We still think tariffs will be stagflationary eventually, as countries retaliate and boost government spending.
- But the balance of risks has shifted to recession after President Trump doubled down over the weekend.
- We cut 2025 GDP growth to 0.7% but leave our rate forecasts unchanged, waiting for clarity on headlines.
- The initial response to US tariffs suggests the barriers are more disinflationary for the UK than most.
- Markets are understandably pricing downside growth tail-risks and the UK avoiding retaliation, for now.
- But we continue to think this tariff fandango will eventually prove to be a stagflationary shock.
- We assume a 10% tariff on UK goods exports to the US lowers 2025 UK GDP growth by 0.2pp.
- But strengthening growth in services—immune from tariffs—shows that UK growth can hold up.
- Strong domestic price pressures will keep the MPC cautious; we still expect two more rate cuts this year.
- We expect CPI inflation to decline to 2.7% in March, matching the MPC’s forecast.
- Petrol price falls will drag inflation down, while core price gains will remain firm.
- March is the calm before the storm of April price hikes, which should drive up headline inflation to 3.6%.
