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.

composite pmi

25 Oct 2022 UK Monitor PMI Data Show a Deepening Downturn, but Price Rises Remain too Rapid

  • October’s PMI data point to a worsening recession; a 0.5% quarter-on-quarter drop in Q4 GDP looks likely.
  • Price rises are slowing, but remain too brisk for the MPC to take breath; we look for a 75bp hike next week.
  • Further falls in interest rate expectations will weigh on sterling now the fiscal credibility gap has largely gone.

Samuel Tombs (UK Economist)U.K.

28 Sept 2022 UK Monitor Surveys Point to a Small Drop in GDP in Q3, but this is Just the Start

  • PMI and confidence data for September suggest GDP edged down for a second consecutive quarter in Q3.
  • The downturn will gather momentum, as borrowing costs for households and businesses soar.
  • We now look for a 1.5% year-over-year decline in GDP in 2023, and CPI inflation not to return to 2% until 2025.

Samuel Tombs (UK Economist)U.K.

16 Sept 2022 UK Monitor The Improved Inflation Outlook Implies the MPC will Stick to a 50bp Hike

  • We think the MPC will raise Bank Rate by 50bp next week, despite other central banks rushing ahead...
  • ...Q3 GDP is set to undershoot the MPC’s latest forecast, while the inflation outlook has improved greatly.
  • Proposed tax cuts are too small to move the inflation needle, and likely will be partly funded by spending cuts.

Samuel Tombs (UK Economist)U.K.

7 Sept 2022 UK Monitor July GDP to Show the Economy has Slowed, but is Not in Recession Yet

  • We look for a modest 0.3% month-to-month rise in July
    GDP, leaving it only 0.1% up from three months earlier.
  • The composite PMI has pointed to stronger growth, but it excludes the distribution and health sectors.
  • Revised GDP estimates later this month likely will show that economic activity still is below its pre-Covid peak.

Samuel Tombs (UK Economist)U.K.

2 Sept 2022 UK Monitor The Inventory of Unsold Properties will Rise Over the Next Year

  • Low unemployment means few homeowners will be forced to sell up, and construction already is declining.
  • Landlords, however, likely will struggle to raise rents in line with the jump in their mortgage payments.
  • We expect the stock of homes on the market, therefore, to rise over the next year, weighing on house prices.

Gabriella DickensU.K.

24 Aug 2022 UK Monitor Flash PMIs Suggest the Economy is Stagnant at Best

August’s PMIs suggest the recovery has petered out, with the manufacturing sector heading into recession.

Employment growth also has come off the boil, while price pressures mostly have continued to ease.

All this suggests the MPC have room to act with caution; a 50bp hike is not the done deal assumed by markets.

Samuel Tombs (UK Economist)U.K.

18 Aug 2022 UK Monitor The Pace of Core Price Rises will Slow Soon, Broadening the MPC's Options

A jump in food prices was the main driver of July’s rise in CPI inflation, and the overshoot of the MPC’s forecast.

The core CPI continued to rise quickly, but recent falls in commodity prices point to slower increases ahead.

Lower petrol prices will mean CPI inflation undershoots the MPC’s forecast in August; a 25bp hike is on the table.

Samuel Tombs (UK Economist)U.K.

16 Aug 2022 UK Monitor A Growing Trade Deficit will Increase Reliance on the Kindness of Strangers

The trade deficit has hit a record share of GDP over the last two quarters, but it will only get worse.

Goods imports will fall, as firms now have excess stock, but the value of energy imports will surge this winter.

The U.K.'s shortfall in exports relative to 2018 remains the largest in the G7; Brexit is largely to blame.

Samuel Tombs (UK Economist)U.K.

11 Aug 2022 UK Monitor June Official Data to Confirm the Labour Market No Longer is Tightening

PAYE data, vacancy figures and business surveys all suggest employment growth slowed in June and July.

Labour supply, however, is picking up; the unemployment rate likely was marginally higher in Q2 than in Q1.

Wages likely continued to rise in June at a rate inconsistent with the inflation target, but probably didn't speed up.

Samuel Tombs (UK Economist)U.K.

9 Aug 2022 UK Monitor The Unemployment Rate will Rise Sooner than the MPC Expects

The MPC currently expects the unemployment rate to remain well below 4% until Q3 2023...

...But timely indicators suggest demand for labour already is cooling, just as supply is starting to recover.

We expect the unemployment rate to rise above 4% before year-end, keeping a lid on wages and rate hikes.

Samuel Tombs (UK Economist)U.K.

2 Aug 2022 UK Monitor Forecast Review: Fiscal Policy and Lower Saving Likely to Avert Recession

We have revised up our forecast for Q4 CPI inflation by 1.0pp since early July; energy prices have surged again.

But we have revised down our forecast for the level of GDP by only 0.5pp in Q4; fiscal policy will respond.

People also have shown more willingness to deplete savings; we still expect a recession to be narrowly avoided.

Samuel Tombs (UK Economist)U.K.

1 Aug 2022 UK Monitor Will a Household Saving Drawdown Keep a Winter Recession at Bay?

Households saved much less and borrowed more in Q2; real spending, therefore, likely was unchanged from Q1.

On paper, households have ample scope to reduce their saving rate further, but we see several constraints.

Some already have depleted savings, credit conditions are tightening, and deleveraging will be more attractive.

Samuel Tombs (UK Economist)U.K.

28 July 2022 UK Monitor Is Britain Really Faring Better than Other Advanced Economies?

The U.K. composite PMI in July was above the 50.0 mark, in contrast to the U.S. and the Eurozone.

We think that this strength can be largely explained by the small manufacturing sector and recent fiscal policy.

Ofgem's energy price cap will rise by a further 23% in April, if the recent surge in wholesale prices is sustained.

Samuel Tombs (UK Economist)U.K.

25 July 2022 UK Monitor PMI Data Imply no Need for the MPC to act "Forcefully" Next Week

PMI data for July show that the recovery in GDP has nearly ground to a halt and inventory is piling up.

Employment growth slowed to a 15-month low, while the pace of input and output price rises eased materially.

On balance, the latest data imply the MPC won't act "forcefully"; market pricing for August is still too high.

Samuel Tombs (UK Economist)U.K.

18 July 2022 Food and Energy Inflation Likely Drove Up the Headline Rate in June

We think that CPI inflation leapt to 9.4% in June, from 9.1% in May, exceeding the MPC’s 9.1% forecast. 

But the upside surprise will be due to a massive rise in motor fuel prices, and another increase in food inflation. 

Core inflation likely fell to 5.8%, from 5.9% in May; June 2021’s surge in goods prices likely wasn’t repeated. 

Samuel Tombs (UK Economist)U.K.

15 July 2022 Sterling is Vulnerable, Due to the Colossal Trade Deficit

The trade deficit remained extremely large by past standards in May, driven by a surge in imports.

We expect the deficit to remain huge over the rest of the year; it is on track to be the biggest since the 70s.

Tory candidates tax pledges would have to be very large in order to alter the economic outlook materially.

Gabriella DickensU.K.

14 July 2022 We Still Expect a Contraction in GDP in Q2, Despite the Sharp Rise in May

May’s rise in GDP was driven by a surge in doctor appointments-

really-and a jump in manufacturing output.

Consumer services firms struggled and will remain under pressure as households’ real incomes fell further.

June’s extra bank holiday also will dampen Q2 GDP, we expect a quarter-on-quarter contraction of 0.3%.

Gabriella DickensU.K.

13 July 2022 Expect More Signs of a Loosening Labour Market Next Week

We think employment grew at a steady 0.5% threemonth-on-three-month pace in May.

But expect even faster growth in the workforce to mean that the unemployment rate edged up again.

Surveys suggest wage growth had no more momentum in May than in prior months.

Gabriella DickensU.K.

1 July 2022 Most of Q1's Increase in GDP Likely was Reversed in Q2

The first quarter’s rise in GDP has brittle foundations; households have had to retrench in Q2.

The support to GDP growth from restocking will fade; firms now have enough inventory to meet demand.

A recession, however, isn’t likely; households’ real dis- posable incomes will rise in Q3, and capex will recover.

Samuel Tombs (UK Economist)U.K.

24 June 2022 June's Stable PMI Provides Little Reassurance on Q2 GDP

The composite PMI held steady at 53.1 in June, but it has been misleadingly upbeat in recent months.

It excludes the retail and public sectors, both of which will drag on quarter-on-quarter GDP growth in Q2.

We still forecast a 0.7% q/q drop in Q2 GDP, and only a 25bp increase in Bank Rate in August.

Gabriella DickensU.K.

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