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.

corporations Housing Supply

16 May 2022 Net Upside Risk to the MPC's 9.1% Forecast for April CPI Inflation

CPI inflation likely soared to 9.2% in April, from 7.0% in March, largely due to the jump in the energy price cap.

BRC data are consistent with another large rise in core goods prices, while services prices likely shot up too...

...In response to the hospitality VAT hike, big increases in phone contract prices, and an Easter boost to airfares.

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.

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.

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.

11 Mar 2022 Households will Mitigate the Inflation Hit by Shifting their Spending Mix

  • Households previously have reduced real expenditure on food and energy by 1% for every 5% rise in prices...
  • ...So year-over-year growth in the expenditure deflator will be materially lower than CPI inflation this year.
  • The RICS survey shows the housing market continued to fizz in February, but timelier data are sobering.

Samuel Tombs and Gabriella DickensU.K.

2 Mar 2022 Slow Money Growth Signals Low Medium-Term Risk of High Inflation

  • Money supply growth is weaker than before Covid, signalling macro policy isn't excessively loose.
  • Households have remained unwilling to draw on their "excess savings" to support consumption.
  • House purchase mortgage approvals in January were 11% above their 2015-to-19 average, but will dip soon.

Samuel Tombs (UK Economist)U.K.

17 Feb 2022 Inflation Data Bolster the Case for Rate Hikes, but not 50bp in One Go

  • January's 5.5% rate of CPI inflation only just exceeded the MPC's 5.4% forecast; the surprise was all in goods.
  • Services inflation is only slightly above its long-run average; the MPC needn't panic.
  • The headline rate likely will peak at 7.7% in April, but then fall swiftly, potentially undershooting the target in 2023.

Samuel Tombs (UK Economist)U.K.

11 Feb 2022 Mortgage Rates will Rise Further, Slowing the Housing Market

  • The average rate for a two-year fixed rate mortgage, with a 75% LTV ratio, likely will leap to 2.1%, from 1.6%.
  • This increase won't be a problem for most refinancers, but it will impact affordability for new homebuyers.
  • Next week's labour market data will show Q4's small drop in employment is on course to be reversed in Q1.

Samuel Tombs and Gabriella DickensU.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.

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.

13 Jan 2022 Job Moves to Revert to Normal Levels this Year, Dampening Wage Growth

  • The proportion of workers changing jobs surged in 2021 to reach its highest level in the past 20 years...
  • ...But lower confidence and a sluggish housing market will drive job moves back to pre-Covid norms this year.
  • Job-to-job moves also will trend down in the 2020s as the population ages, bearing down on wage growth.

Gabriella DickensU.K.

30 Nov 2021 Does October's Low Saving Signal Households' Mindset has Changed?

  • Households last month saved the least and borrowed the most for consumption since the pandemic began...
  • ...People are maintaining their spending while real incomes are falling; they aren't bingeing.
  • Firms continued to repay external finance in October, but this isn't necessarily a bad sign for investment.

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.

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