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.

bill Investment

15 Aug 2022 UK Monitor Q2 GDP Withstood the Government Spending and Jubilee Drags Well

Q2 GDP would have held steady without the Jubilee and risen by 0.9% q/q if Covid spending hadn't plunged.

The 0.2% q/q drop in households' real expenditure was a good result, given the massive fall in real incomes.

A recession isn't inevitable, provided fiscal support is increased substantially and households draw on savings.

Samuel Tombs (UK Economist)U.K.

12 July 2022 Business Investment Still Looks Set to Rise, Reducing Recession Risks

Business investment fell in Q1, partly due to supply disruption preventing orders being fulfilled.

But supply shortages are easing, and with Brexit and Covid uncertainty dissipating, capex should rebound.

A renewed rebound in business investment will support GDP growth in the second half of the year.

Gabriella DickensU.K.

14 June 2022 GDP Set to Contract by about 0.7% Q/Q in Q2, after April's Weak Print

April's fall in GDP was driven by Covid spending, but flat private sector GDP caused the downside surprise.

Consumer services firms likely increasingly struggled during Q2, as households' real incomes fell further.

June's extra bank holiday also will dampen Q2 GDP; the MPC has to lower its forecast for 0.1% q/q growth.

Samuel Tombs (UK Economist)U.K.

1 June 2022 Real Spending Looks Set to Drop as Households Continue to Save More

Households still were unwilling to use their excess savings in April, despite the sharp drop in real incomes.

With excess savings equal to £186B and consumer credit £23B below its peak, consumers still can spend.

But low confidence, the unequal distribution of savings and falling incomes suggests expenditure will dip in Q2.

Gabriella DickensU.K.

13 May 2022 Brisk Quarterly GDP Growth Masks a Slowdown during Q1

Q1 GDP grew faster in the U.K. than overseas because consumers were shielded from higher energy prices.

Monthly data show growth slowed during Q1; falling retail sales were more than just a consumer rotation.

Falling real incomes, declining health spending and the extra bank holiday will reduce GDP in Q2.

Samuel Tombs (UK Economist)U.K.

1 Apr 2022 Don't Mistake the Swift Recovery in GDP for Private Sector Strength

  • GDP has returned to its pre-recession level faster than after the four previous downturns...
  • ...But this strength reflects high government spending; "private-sector" GDP was nearly 3% below its peak.
  • Sub-par growth in households’ financial wealth adds to the list of reasons to expect little dis-saving ahead.

Samuel Tombs (UK Economist)U.K.

24 Mar 2022 Incomes Still Set to be Pummelled, Despite Last-Minute Tax Changes

  • Tax and benefit changes will lop 1.3% off disposable incomes in 2022-23, despite Mr. Sunak's new tax cuts.
  • The Chancellor could have been bolder; he has more headroom against his fiscal targets than in October.
  • Don't bank on extra pre-election tax cuts; the OBR is too upbeat on households' spending and productivity.

Samuel Tombs and Gabriella DickensU.K.

1 Mar 2022 Business Investment Should Ensure GDP Remains on a Rising Path

  • We look for year-over-year growth in business investment to pick-up this year, reaching about 10% in Q4.
  • Brexit and Covid uncertainty has faded, profit margins are healthy, and firms have excess cash.
  • Higher oil prices will boost capex in the North Sea and in energy efficiency, but higher rates will hurt some firms.

Samuel Tombs (UK Economist)U.K.

28 Feb 2022 Markets Still Overestimating the Scope for Further Rate Hikes

  • Real household disposable income is set to drop by 2.0% this year, the most since the Second World War.
  • The Chancellor likely won't come to households' res- cue; debt interest and military spending is set to jump.
  • We have nudged down our GDP forecast and now expect it to be up only 1.5% year-over-year in Q4.

Samuel Tombs (UK Economist)U.K.

10 Feb 2022 The Recovery in Construction Output will Gain a New Lease of Life this Year

  • Easing supply constraints and labour shortages should boost the recovery in construction in H1 2022.
  • Further ahead, falling real incomes and increases in mortgage rates will dampen housebuilding activity...
  • ...Even so, we expect construction output by year end to be about 1.5% above its 2019 average level.

Gabriella DickensU.K.

3 Feb 2022 Will Supply Constraints Continue to Ease, Reducing Inflation Risk?

  • Supply chain disruptions, bottlenecks and goods and labour shortages have limited the recovery...
  • ...But the last month has brought signs of progress of all fronts, despite the surge in Covid-19 infections.
  • Supply disruptions should continue to ease, but labour shortages probably will be more persistent.

Gabriella DickensU.K.

2 Feb 2022 Money Supply Data Suggest the Economy Won't Overheat This Year

  • Growth in the broad money supply reverted to its pre-Covid rate in Q4, despite very low interest rates.
  • Households dipped into their excess savings in December to maintain their spending, not increase it.
  • Mortgage refinancing will cease to boost disposable incomes in 2022; the effective rate will stabilise.

Samuel Tombs (UK Economist)U.K.

1 Feb 2022 The Trade Deficit Will Widen this Year, Increasing Sterling's Vulnerability

  • The overall trade deficit will more than double in 2022, as the value of natural gas imports surges...
  • ...And the structural deficit in travel and transportation services gradually re-emerges.
  • Financial inflows will pick up too, supporting sterling, but another risk-off episode would hurt the pound.

Samuel Tombs (UK Economist)U.K.

26 Jan 2022 Surging Interest Costs Won't Stop Sunak Easing the Real Wage Squeeze

  • Public borrowing in 2021/22 looks set to come in at about £170B, £13B below the OBR's Budget forecast.
  • The hit from higher interest payments will exceed the windfall from higher-than-forecast GDP in 2022/23...
  • ...But Mr. Sunak built some wriggle room into his plans; he can intervene on energy prices and meet his targets.

Samuel Tombs and Gabriella DickensU.K.

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U.K. Document Vault, Pantheon Macro, Pantheon Macroeconomics, independent macro research, independent research, ian shepherdson, economic intelligence