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

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construction

13 Sept 2021 Covid Put the Brakes on July GDP; Expect a Lingering Drag This Year

  • Surging Covid-19 cases largely were responsible for the near-stagnation of GDP in July.
  • The virus no longer is driving labour shortages, but many remain fearful and will spend less if it picks up.
  • We still look for quarter-on-quarter growth in 1.5% in Q3, half the rate expected by the MPC.

Samuel Tombs (UK Economist)U.K.

10 Sept 2021 Hidden Slack will Rise More than the Unemployment Rate, Post-Furlough

  • The number of workers on furlough decreased again in July, as government contributions were tapered...
  • ...But usage remains high in sectors that already have fully recovered, and among financially-weak SMEs.
  • We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; hidden slack will rise much more.

Samuel Tombs (UK Economist)U.K.

7 Sept 2021 July GDP to Undershoot the Consensus with a No-Change Print

  • GDP likely held steady in July, falling short of the consensus and the level implied by the BoE's Q3 forecast.
  • Surging Covid cases depressed output in the distribution, food services and education sectors.
  • A decline in new Covid-19 vaccinations probably led to a reduction in output in the health sector too. 

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Markit CIPS Construction Survey, August 2021

  • In one line: No sign of shortages of raw materials or staff lessening yet.

Samuel Tombs (UK Economist)U.K.

2 Sept 2021 Can the Recovery Advance Even if the Covid Situation Deteriorates?

  • Shortages of workers and, to a lesser extent, materials, should ease in Q4, enabling output to rise.
  • Businesses plan to invest more over the coming quarters, and can continue to adapt to Covid-19.
  • Public sector output will rise too; school attendance will pick up and waiting lists will keep hospitals busy.

Samuel Tombs (UK Economist)U.K.

18 Aug 2021 Employment has Risen Briskly, but will Fall Back when Furlough Ends

  • Employee numbers have rebounded since the spring, but total employment is lagging behind.
  • Vacancies are high, but are concentrated in different sectors to those which will see post-furlough layoffs.
  • High inflation and 4-to-5% unemployment didn't lift wage growth in 2017, and probably won't this time.

Samuel Tombs (UK Economist)U.K.

13 Aug 2021 The Run of Robust Month-to-month Gains in GDP Likely Ended in July

The U.K. economy was the G7's straggler for a fifth consecutive quarter, despite the rebound in Q2.
GDP will barely rise in July; June's surges in output in the health and advertising sector will reverse...
...while data from OpenTable and the BRC point to a step down in consumers' spending last month.

Samuel Tombs (UK Economist)U.K.

12 Aug 2021 Will Car Sales Remain at Q2's Elevated Level?

Car demand surged in Q2, as easing Covid-19 restrictions boosted consumers' confidence.
But shortages of key components have limited the supply of new cars; used car sales have surged.
Used car sales look set to remain elevated this year, pushing up prices.

Samuel Tombs (UK Economist)U.K.

11 Aug 2021 Will Sterling Still be 2021's Best Performing Currency by Year End?

By the autumn, vaccination rates no longer will be higher in the U.K. than other advanced economies.
The chances of U.S. and U.K. rates rising in lockstep are remote; the U.S. recovery is far more advanced.
U.K. political risks are low now, but next year investors will start to weigh the risks from the 2024 election.

Samuel Tombs (UK Economist)U.K.

10 Aug 2021 Setting out our Base and Reasonable Worst Cases for Covid This Winter

Covid-19 cases likely will pick up in September, as schools return and building ventilation declines.
Business closures in Q4 aren't likely, but households will remain cautious, delaying a full recovery.
In the event of a new variant and lockdown, we think the MPC would cut rates to -0.25%, despite 4% inflation.

Samuel Tombs (UK Economist)U.K.

6 Aug 2021 The MPC's New Forecasts Set a High Bar for Future Upside Surprises

The MPC's forecasts imply markets' expectations for future rate hikes are about right...
...But the risks to the MPC's economic forecasts now are skewed firmly to the downside.
We now expect the first rate hike in Q2 2023, slightly earlier than before, with QE wind-down coming later.

Samuel Tombs (UK Economist)U.K.

5 Aug 2021 Will the MPC Finally Set Out its Views on the Lower Bound and Sequencing?

Now that negative rates are in the toolkit, the MPC might divulge its new estimate for the lower bound.
The MPC also might lower the threshold that Bank Rate must reach before it starts to wind down QE.
We expect Ofgem to announce on Friday that the default tariff cap will rise by a painful 13.5% in Q4.

Samuel Tombs (UK Economist)U.K.

4 Aug 2021 Furlough Usage isn't Falling Fast Enough to Signal a Painless End in Q4

The proportion of staff furloughed fell to 5.7% at the end of June, from 7.5% a month earlier...
...But surveys point to only a marginal fall in early July, and still high usage in fully recovered sectors.
Firms likely won't fully relinquish recent productivity gains; the employment rate will drop back in Q4.

Samuel Tombs (UK Economist)U.K.

3 Aug 2021 When will the Manufacturing Sector's Recovery Get Back on Track?

The recovery in the manufacturing sector slowed in July, probably to a complete standstill.
Output should pick up in the autumn, amid easing supply constraints and robust restocking demand...
...But we see little chance of long-term reshoring; Brexit is another barrier to a sustained recovery.

Samuel Tombs (UK Economist)U.K.

2 Aug 2021 Rising Covid-19 Cases Temporarily Slowed the Recovery in July

The ONS' Business Impact of Covid-19 survey suggests business turnover has flatlined since late May.

The disruption caused by the "pingdemic" wors- ened in late July, but likely is now starting to fade.

Unemployment still looks set to jump in Q4, despite another hefty drop in furlough scheme usage in June

Samuel Tombs (UK Economist)U.K.

29 July 2021 Strong Pushback from the MPC's Doves Suggests QE will Roll on

Q2 CPI inflation exceeded the MPC's one-quarter ahead forecast by the most for 13 years...
...But only two members have implied they will vote to end QE; pushback from the doves has been strong.
Inflation expectations have remained well-anchored;Team Transitory probably is right.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Markit/CIPS Construction Survey, June 2021

In one line: Demand still is rising briskly, but manufacturers can’t keep up.

Samuel Tombs (UK Economist)U.K.

5 July 2021 May GDP to Show the Recovery Shifting Down from Top Gear

May's GDP report, released on Friday, likely will show that the economic recovery decelerated, despite the further reopening of the consumer services sector mid-way through the month.

Samuel Tombs (UK Economist)U.K.

9 June 2021 GDP Likely Jumped to Within 4% of its Pre-Covid Level in April

We expect April’s GDP report, released on Friday, to show that the economy continued to recover at a rapid rate in April.

Samuel Tombs (UK Economist)U.K.

7 June 2021 Is Still-High Furlough Scheme Usage a Cause for Concern?

MPC members have made it clear that the evolution of slack in the labour market will have a crucial bearing on the timing of the first increase in Bank Rate.

Samuel Tombs (UK Economist)U.K.

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