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.

Mortgage Lending and Sales

UK Datanote: U.K. BRC Retail Sales Monitor, April 2022

  • In one line: Dropping again, as households tighten their purse strings.

Samuel Tombs (UK Economist)U.K.

10 May Will Rising Mortgage Rates Push House Prices Down?

Monthly payments will jump by about £100 for most households who refinance mortgages this year.

Mortgage approvals will fall sharply in the second half of this year in response to higher rates.

But house prices likely will stabilise, not fall; the supply of homes coming to the market will contract too.

Samuel Tombs (UK Economist)U.K.

9 May 2022 GDP Likely was Unchanged in March, Preluding a Contraction in Q2

The boost to activity from the removal of final Covid restrictions likely was offset by falling health sector output.

Higher energy prices and fresh supply chain frictions, following the war in Ukraine, likely hit manufacturing.

Retail sales and car sales fell, while the recovery in the hospitality sector appears to have topped out.

Samuel Tombs (UK Economist)U.K.

5 May 2022 Households are Showing Little Sign of Riding out the Real Income Shock

Households must save less—or borrow more—to the tune of £9B in Q2, in order for real spending not to fall. 

That is possible, given that "excess savings" are £186B and consumer credit is £25B below its peak.

But people didn't draw on savings in March and still are reluctant to borrow, so GDP looks set to dip in Q2.

Samuel Tombs (UK Economist)U.K.

3 May 2022 Forecast Review, The Near-Term Outlook for GDP Has Worsened

The near-term outlook for households' real disposable income looks bleak; we still expect GDP to drop in Q2.

A recession, however, isn't our base case; people have ample scope to draw on savings and to borrow more.

We now Bank Rate to top out at 1.25% this year, not 1.00%, but still think markets have lost the plot.

Samuel Tombs (UK Economist)U.K.

26 Apr 2022 The PMI Turned Down in April, but is Still too Upbeat on Q2 GDP Growth

The composite PMI points to solid quarter-on-quarter GDP growth of 0.7% in Q2, despite falling in April.

The PMI, however, likely is too upbeat; it excludes government expenditure and retail sales, which are falling.

It might also be too strong when turnover is being lifted by price rises; we still expect GDP to drop in Q2.

Gabriella DickensU.K.

UK Datanote: U.K. Retail Sales, March 2022

  • In one line: Consumers are buckling under the pressure.

Samuel Tombs (UK Economist)U.K.

22 Apr 2022 Which of the Conflicting Indicators of Employment Should Be Believed?

The upward trend in the PAYE measure of employees is more plausible than the flat trend presented by the LFS.

Very strong survey indicators might reflect rising average hours and likely are insensitive to rising quits.

Employment growth looks set to slow from Q2, due to the rise in NICs and weaker demand.

Gabriella DickensU.K.

21 Apr 2022 Stockbuilding will Swing to Depressing GDP Growth Shortly

Firms want to hold more stocks than in the 2010s, but now are accumulating them at a slower pace.

GDP growth depends on the rate of change in inventories, so the deceleration will depress growth.

Futures prices historically have been a better guide to energy prices than assuming they don't change.

Samuel Tombs (UK Economist)U.K.

20 Apr 2022 The RPI-CPI Wedge will Return to its Pre-Covid Norm Next Year

RPI inflation will rise even more than CPI inflation in April, due to the bigger weighting of energy prices.

But house price growth is about to slow, while mortgage interest payments will rise only slowly.

Weighting differences point to a bigger drag on RPI inflation from falling energy prices next year.

Samuel Tombs (UK Economist)U.K.

19 Apr 2022 The Recent Strength in House Price Growth Won't Last Much Longer

House price growth was strong in Q1, but will now slow, due to rising mortgage rates and falling real incomes.

Several timely indicators of demand, including the RICS new buyer enquiries balance, are starting to soften.

House price growth looks set to slow to 4.5% this year, and mortgage approvals will fall to pre-Covid levels.

Gabriella DickensU.K.

UK Datanote: U.K. BRC Retail Sales Monitor, March 2022

  • In one line: Sharp slowdown in year-over-year growth reflects base effects, but the outlook isn’t promising.

Samuel Tombs (UK Economist)U.K.

11 Apr 2022 Rising Mortgage Rates will Soon Call Time on Rapid House Price Gains

The two-year fixed 75% LTV mortgage rate leapt by 35bp to 2.11% in March; it is set to rise to 2.7% by Q4. 

The current tight spread between mortgage rates and risk-free rates is unsustainable; deposit rates will rise too. 

Most refinancers will cope, but the rise in new rates will be severe enough to slow house price growth. 

Samuel Tombs (UK Economist)U.K.

6 Apr 2022 Falling Health Sector Output Likely Caused GDP to Drop in February

Output in the consumer services sector recovered strongly in February, assisted by fading Covid fears.

...But output in the health sector likely fell considerably, due to sharp falls in Covid testing and vaccinations.

Manufacturing output was hit by a slump in car production, while building work was disrupted by storms.

Samuel Tombs (UK Economist)U.K.

5 Apr 2022 No Recession Signalled by Financial Market Indicators

The U.K. yield curve has not inverted and inversion is not a reliable bellwether of U.K. recessions.

Equity prices for consumer-facing companies have fallen sharply, but not yet to recession levels.

The oil price has been this high before without triggering a downturn, and GDP is less energy-intensive now. 

Samuel Tombs (UK Economist)U.K.

30 Mar 2022 Households Still Aren't Drawing on Savings, But Borrowing is Picking Up

  • Slowing money supply growth and households' continued reluctance to deplete savings are worrying signs...
  • ...But real expenditure could still rise this year if the recovery in unsecured borrowing gathers momentum.
  • Mortgage approvals have further to fall this year, but remortgaging activity should remain strong.

Samuel Tombs (UK Economist)U.K.

28 Mar 2022 Does the Plunge in Confidence Signal an Imminent Recession?

  • A recession has ensued on four of the five past times when consumers' confidence is as low as it is currently.
  • The outlook for households' real disposable income is ghastly; we now expect a 2.5% y/y drop in 2022...
  • ...But if employment keeps rising, people should be will- ing to draw on savings to maintain their real spending.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Retail Sales, February 2022

  • In one line: Recession-level confidence bodes ill for retailers.

Samuel Tombs (UK Economist)U.K.

21 Mar 2022 The Housing Market's Strong Start to the Year will Not Endure

  • House prices appear to have risen further in Q1, but timely data suggest that buyer demand now is cooling.
  • The outlook for rising mortgage rates, falling real incomes and low confidence does not bode well.
  • We expect year-over-year growth in house prices to slow from its current 10% rate to 3.5% by year-end.

Gabriella DickensU.K.

14 Mar 2022 GDP Likely to Dip in Q2, Despite Current Momentum

  • January's rebound should ensure GDP rises by nearly 1% q/q in Q1, far exceeding the MPC's expectations.
  • But Test & Trace and vaccination activities boosted GDP by 2% in January; this support soon will gone.
  • Q2 GDP also will be hit by the extra bank holiday and a sharp fall in real incomes; we look for a 0.2% q/q drop.

Samuel Tombs (UK Economist)U.K.

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