Pantheon Macroeconomics

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U.K. Publications

Below is a list of our U.K. Publications for the last 6 months. If you are looking for reports older than 6 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.

Fed House Prices

21 Jan 2022 House Price Growth to Slow in 2022 as Mortgage Rates Rise

  • House price growth remained strong in Q4, despite the return of the SDLT threshold to £125K at the end of Q3.
  • Timely indicators, however, suggest Omicron weighed on buyer demand at the end of the year, and in January.
  • Higher mortgage rates and falling real incomes will cause house price growth to decelerate this year.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Official House Price Index, November 2021

  • In one line: Shaking off the SDLT threshold drop, but higher mortgage rates will weigh on growth this year. 

Samuel Tombs (UK Economist)U.K.

24 Dec 2021 House Prices will Stagnate in H1 2022, but are Unlikely to Fall Outright

  • House price growth dipped in October following the return of Stamp Duty Land Tax threshold to £125K...
  • ...But that most likely is a blip; timelier indicators of house price growth have remained strong in Q4.
  • We expect house price growth to stagnate in H1 2022, as mortgage rates rise and real incomes fall.

Gabriella DickensU.K.

17 Dec 2021 The MPC will Give the Economy Breathing Space Before Hiking Again

Markets now expect the MPC to hike Bank Rate to 0.50% in February, following today's surprise hike.

Most members, however, thought the decision was "finely balanced" and see a "modest" tightening ahead.

Omicron won't just have short-term effects if the MPC hikes again and pushes firms over the edge.

Samuel Tombs and Gabriella DickensU.K.

16 Dec 2021 Subdued Services Inflation Gives the MPC Time to Wait for Omicron

November's 5.1% CPI inflation rate was 0.6pp above the forecast made by the MPC only last month...

...But high inflation is due to surging energy and goods prices; underlying services inflation remains subdued.

We expect the headline rate to peak at 6.0% in April, but then to fall sharply, slipping below-target in 2023.

Samuel Tombs and Gabriella DickensU.K.

15 Dec 2021 Labour Market to Warrant Gradual Rate Hikes, Once Omicron Wanes

The unemployment rate continued to fall in October, despite the end of the furlough scheme.
Some full-time workers have become part-timers post-furlough, but they don't seem to want more hours.
Wage growth, however, slowed to a below-inflation rate in October; the real wage squeeze will get worse.

Samuel Tombs and Gabriella DickensU.K.

14 Dec 2021 Sterling to Continue to Slide in 2022, Hurt by the U.K.'s Covid Sensitivity

Trade-weighted sterling has fallen by about 2% since late October; bets on a further drop have intensified.
The U.K. economy is more Covid sensitive than most; the downside risk to rate expectations is greater.
Investors next year increasingly will price-in the risks of a messy outcome to the next general election.

Samuel Tombs and Gabriella DickensU.K.

2 Dec 2021 Could the Economy Cope Next Year with the Rate Hike Markets Expect?

  • Markets expect the MPC to hike Bank Rate by nearly 100bp next year, the most in one year since 2007.
  • Rising mortgage rates likely would subtract just 0.1pp from households' disposable incomes next year...
  • ...But house prices would flatline, so 100bp is on the limit of feasibility; Omicron brings downside risks.

Samuel Tombs (UK Economist)U.K.

22 Nov 2021 Q4 Retail Sales won't be Stellar, Despite October's Good Start

  • October's rise in retail sales volumes was driven solely by people buying Christmas presents earlier than usual.
  • Consumers' confidence recovered in November, but still is below-average, and will drift down over the winter.
  • A large minority of people remain fearful of Covid; rising cases likely will instil greater caution over the winter.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Official House Price Index, September 2021

  • In one line: Boosted by the SDLT changes; higher mortgage rates cast a shadow over the 2022 outlook.

Samuel Tombs (UK Economist)U.K.

10 Nov 2021 Political Risks Likely will Re-Emerge as a Drag on Sterling Next Year

  • The Conservatives' poll lead has virtually disappeared; we doubt it will re-emerge next year.
  • Higher inflation and rising interest rates will keep consumers' confidence weak.
  • A hung parliament would bring to the fore Brexit and Scottish independence risks again, weakening sterling.

Samuel Tombs (UK Economist)U.K.

4 Nov 2021 Look to the Housing Market, not Interest Payments, for Rate Hike Pain

  • The effective mortgage rate will be just 20bp or so higher at the end of 2022, if markets' Bank Rate view is right.
  • The interest rate on bank deposits would rise by more, so households' net interest payments would fall, initially.
  • The housing market, however, looks like the weak link; we expect house prices to flatline in H1 2022.

Samuel Tombs (UK Economist)U.K.

22 Oct 2021 House Prices will Flatline in H1 2022, if Markets are Right about Rates

  • This month's Stamp Duty change has left housing unscathed; we look for a 0.5% q/q rise in house prices in Q4.
  • House prices, however, will flatline in H1 2022; two-year fixed rate mortgage rates will jump by 60bp in Q4...
  • ...The squeeze on households' real income, as inflation rises and taxes increase, also will subdue the market.

Samuel Tombs (UK Economist)U.K.

7 Oct 2021 Could the Economy Withstand the Rate Hikes Markets Expect?

  • Markets expect interest rates to rise more in the next 15 months than in any other period since 2007.
  • Firms are well placed to cope, and the effective interest rate on all mortgage debt would rise only slowly...
  • ...But higher new mortgage rates would hit spending via lower house prices or higher mortgage payments.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Nationwide House Prices, September 2021

  • In one line: The start of a period of relatively restrained growth in house prices.

Samuel Tombs (UK Economist)U.K.

17 Sept 2021 House Prices Should Recover Steadily in 2022 after Q4's Fall

  • Year-over-year growth in house prices slowed in July, following the tapering of government support.
  • Expect a further slowdown in Q4, when the SDLT threshold will return to £125K and real incomes will fall.
  • The outlook for 2022, however, is brighter; falling mortgage rates and tight supply will support prices.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Nationwide House Prices, August 2021

  • In one line: House price increase set to partially reverse in Q4.

Samuel Tombs (UK Economist)U.K.

20 Aug 2021 House Price Growth has Peaked, but Will Remain Positive Next Year

  • House price growth surged to 13.2% in June—the highest rate since late-2004—from 9.8% in May.
  • As government support fades and inflation rises, squeezing real incomes, price growth will slow...
  • ...But lower mortgage rates will prevent a marked slowdown; we have revised up our 2022 forecasts.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Official House Price Index, June 2021

  • In one line: A hefty jump, but expect price growth to slow over the remainder of the year.

Samuel Tombs (UK Economist)U.K.

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