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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Elliott Laidman Doak (Senior UK Economist)
- In one line: Small fall in inflation expectations helps the case for a rate cut next week.
- Official house prices fell in September, and we think activity will remain weak in Q4…
- ...But the private-sector house price indices are rising again, and surveyors are becoming more optimistic.
- So, we look for house price inflation of 3.0% in Q4 2026, up from 2.25% in Q4 2025.
HOUSE PRICES FELL IN SEPTEMBER...
- ...AND BUDGET WORRIES WILL WEIGH ON ACTIVITY IN Q4
- The Budget cuts inflation in 2026 but raises it later, so there is no impact on the medium-term path for rates.
- Latest estimates of the neutral rate continue to suggest little room for the MPC to cut rates quickly.
- The Government will likely support the neutral rate with heavy debt issuance and tight immigration rules.
- Backloaded distortionary tax hikes will lack the credibility of an income tax hike.
- Ms. Reeves will struggle to fund the biggest directly inflation reducing measures speculated about.
- Gilt yields are likely to rise after a less disinflationary and credible Budget than expected.
- In one line: Manufacturing output to remain weak in Q4.
- The Government’s U-turn on hiking income tax shows that the political situation is deteriorating…
- ...So, we raise our forecast for the 10-year yield to end 2025 at 4.65%, and the 30-year at 5.45%.
- Risks to yields are upward as a potential Labour Party leadership challenge increases the pressure to spend.
- The labour market report was dovish, as it showed employment falling and wage growth easing sharply.
- Weak jobs all but seal a December Bank Rate cut; we are close to forecasting another in spring 2026…
- …But surveys are stable, and we have doubts about the sharp rise in the unemployment rate.
HOUSE PRICES ROSE IN AUGUST...
- ...BUT THE MARKET WILL REMAIN SUBDUED IN Q4
- We expect GDP to rise by 0.1% in September, boosted by solid retail sales and car registrations.
- Industrial production likely cut 8bp from GDP growth in September as a cyber attack halted autos output.
- Resilient economic activity means the MPC has little scope to cut quickly in 2026, in our view.
- We expect ‘final’ payrolls to be unchanged month-to-month in October.
- The bulk of evidence points to employment growth stabilising as the hit from payroll-tax hikes fades.
- Private pay growth should slow further, encouraging MPC doves that they can cut rates in December.
- The insolvency rate has plateaued above pre-pandemic levels but is unthreatening.
- We see little indication that higher insolvency rates will lead to a sharp rise in unemployment.
- Insolvency numbers will fall as businesses adjust to higher interest rates and GDP growth holds firm.
