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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UK Datanote: U.K. Money & Credit, October 2021

  • In one line: Lower saving by households likely due to higher inflation and early Christmas gift buying.

Samuel Tombs (UK Economist)U.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.

29 Nov 2021 Forecast Review: MPC Caught Between Higher Inflation and Omicron

  • Recent activity data have surprised to the upside, but the Omicron variant casts a shadow over Q1.
  • The near-term path for inflation looks much higher than a month ago, after October's above-consensus data.
  • The MPC likely will hike Bank Rate in December, but markets' expected 2022 rate path looks far too steep.

Samuel Tombs (UK Economist)U.K.

25 Nov 2021 Business Investment Held Back by Supply Side Constraints

  • Capex failed to pick up at all in Q3, as firms struggled to get their hands on transport equipment.
  • Firms, however, appear keen to invest and have the financial resources, so a rebound remains likely.
  • We expect capex to rise by about 10% in 2022 and 4% in 2023, eventually returning to 2019's level.

Samuel Tombs (UK Economist)U.K.

23 Nov 2021 MPC Members are Keeping their Options Open, No Matter the Data

  • MPC members Bailey and Pill are sitting on the fence, despite last week's upside data surprises.
  • In a weekend paper interview, the Governor highlighted the public sector's role in driving the recovery.
  • We put the odds of a December rate hike at 60%, well below the 80-to-90% range priced by markets.

Samuel Tombs (UK Economist)U.K.

19 Nov 2021 Near-Real-Time Indicators Signal a Further Slowdown in Q4

  • The ONS' BIC survey suggests the recovery stalled in both October and November
  • OpenTable figures show that the boom in dining out has faded in November.
  • We expect quarter-over-quarter GDP growth to slow to 1.0% in Q4, from 1.5%, and below the consensus, 1.1%

Gabriella DickensU.K.

18 Nov 2021 October's CPI Data Tip the Scales Towards a December Rate Hike

  • October's 4.2% rate of CPI inflation was well above the MPC's 3.9% forecast; such a large error margin is rare.
  • The upside surprise came from the core, and will carry over to future months; April's peak looks set to top 5%.
  • Mean-reversion in energy and goods prices, however, should ensure that CPI inflation dips below 2% in 2023.

Samuel Tombs (UK Economist)U.K.

17 Nov 2021 Relief on Unemployment, but Still No Clarity on Wider Labour Market Slack

  • The 0.6% m/m rise in payroll employee numbers in October implies unemployment didn't rise post-furlough...
  • ...But the drop in median pay in October suggests many furloughed staff have returned only part-time.
  • Year-over-year growth in wages continued to slow in September; no sign of a wage-price spiral forming.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Labour Market Data, September/October 2021

  • In one line: Payroll data suggest unemployment hasn’t risen post-furlough.

Samuel Tombs (UK Economist)U.K.

12 Nov 2021 Weak GDP Growth in Q3 Leaves the U.K. as the G7's Straggler Again

  • U.K. GDP was 2.1% below its Q4 2019 level in Q3, exceeding the shortfalls seen in other G7 counties.
  • Households have continued to spend more cautiously than those abroad; high virus levels are partly to blame.
  • Brexit also has contributed to the continued underper- formance; exports were 17% below their 2019 average.

Samuel Tombs (UK Economist)U.K.

10 Nov 2021 Political Risks Likely will Re-Emerge as a Drag on Sterling Next Year

  • The Conservatives' poll lead has virtually disappeared; we doubt it will re-emerge next year.
  • Higher inflation and rising interest rates will keep consumers' confidence weak.
  • A hung parliament would bring to the fore Brexit and Scottish independence risks again, weakening sterling.

Samuel Tombs (UK Economist)U.K.

9 Nov 2021 Is it Already Clear the End of the Furlough Scheme has been Painless?

  • Nearly 4% of all staff still were furloughed in September, yet redundancies appear to have remained low.
  • Involuntarily part-time working, however, likely became much more widespread in Q4.
  • October's labour market data will be partial and might not offset concerns about the recovery's strength.

Samuel Tombs (UK Economist)U.K.

5 Nov 2021 Markets Jolted Back to Reality by a Cautious MPC

  • On balance, we still think the MPC won't act next month; Mr. Bailey hinted October's labour data may not suffice.
  • The MPC's inflation forecasts seemingly support markets' view that rates will rise to 1.0% by the end of 2022...
  • ...But they are based on implausible energy price figures; its spare capacity forecasts point to a lower rate path.

Samuel Tombs (UK Economist)U.K.

3 Nov 2021 Is the Outlook for Households' Incomes Brighter After the Budget?

  • Budget announcements, including the jump in National Living Wage, will support earnings growth next year...
  • ...but higher taxes and inflation suggest real take home pay will fall by 1.5%, the most since 2011.
  • This is one key reason we expect the MPC will hike Bank Rate by less than markets currently expect.

Samuel Tombs (UK Economist)U.K.

2 Nov 2021 Households won't Abandon their Cautious Mindset Anytime Soon

  • Households continued in September to save more and borrow less than they did before Covid.
  • The recovery in spending will continue only if households save less in response to falling real incomes...
  • Households did this in 2016, but are less confident now, despite having a larger precautionary buffer.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Money & Credit, September 2021

  • In one line: Households still saving more than usual; low confidence suggests caution will continue.

Samuel Tombs (UK Economist)U.K.

28 Oct 2021 A Budget with an Eye on the Next Election, not Near-Term Popularity

  • The Chancellor spent only about half of the windfall stemming from the OBR's rosier economic forecasts...
  • ...In order to build scope to cut taxes before the next election, while still meeting his new fiscal targets.
  • The OBR's new GDP forecasts are too upbeat, while its debt interest forecast is too low, but this won't matter.

Samuel Tombs and Gabriella DickensU.K.

25 Oct 2021 Where Does Last Week's Data Deluge Leave the MPC?

  • Markets are pricing-in a 65bp rise in Bank Rate by March and expect the first hike to come next week...
  • ...But falling consumer confidence, low pay settlements and rising Covid cases strengthen the case for patience.
  • November is "live", but markets' conviction is too strong; potential swing voters on the MPC have been very

Samuel Tombs (UK Economist)U.K.

19 Oct 2021 Here's What Governor Bailey Actually Said

  • Are you sure Governor Bailey said something new on Sunday? Governor Bailey thought not.
  • The statement "we will have to act" was qualified; medium-term inflation expectations need to be worrying.
  • Confidence has fallen in response to rising inflation expectations;  workers don't expect wages to keep pace.

Samuel Tombs (UK Economist)U.K.

18 Oct 2021 September's CPI Data will be the Calm Before the Storm

  • CPI inflation likely was unchanged in September from August's 3.2% rate.
  • Used car prices have surged again, while surveys point to retailers increasing prices faster than usual...
  • ...But motor fuel prices rose only slightly, and accom- modation and food services inflation likely fell back.

Samuel Tombs (UK Economist)U.K.

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