Pantheon Macroeconomics

Best viewed on a device with a bigger screen...

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.

electricity

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.

27 Apr 2022 Public Borrowing Likely to Exceed the OBR's Forecast This Year

The estimate of public borrowing in 2021/22 almost certainly will be revised down over the coming months.

But we think public borrowing is on course to overshoot the OBR's forecast in 2022/23 and beyond.

The OBR's assumption that productivity will grow at double the pace seen in the 2010s is implausible.

Samuel Tombs (UK Economist)U.K.

21 Apr 2022 Stockbuilding will Swing to Depressing GDP Growth Shortly

Firms want to hold more stocks than in the 2010s, but now are accumulating them at a slower pace.

GDP growth depends on the rate of change in inventories, so the deceleration will depress growth.

Futures prices historically have been a better guide to energy prices than assuming they don't change.

Samuel Tombs (UK Economist)U.K.

20 Apr 2022 The RPI-CPI Wedge will Return to its Pre-Covid Norm Next Year

RPI inflation will rise even more than CPI inflation in April, due to the bigger weighting of energy prices.

But house price growth is about to slow, while mortgage interest payments will rise only slowly.

Weighting differences point to a bigger drag on RPI inflation from falling energy prices next year.

Samuel Tombs (UK Economist)U.K.

14 Apr 2022 CPI Inflation will Fall Next Year Almost as Sharply as it Has Climbed

We look for two further 25bp increases in Bank Rate this year, not one, after March's jump in CPI inflation.

CPI inflation looks set to peak at about 9% in April and remain above 8% until the very end of this year.

But energy and core goods inflation will plunge next year; the MPC needn't be as active as markets expect.

Samuel Tombs (UK Economist)U.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.

UK 7 Mar 2022 Forecast Review: Brace for an 8% Double Peak in CPI Inflation

  • CPI inflation now is set to rise to 8% in April, and touch 8% again in October, due to the surge in energy prices. 
  • Low confidence implies households won't touch their savings much, so we have lowered our GDP forecast. 
  • Markets expect four more 25bp rate hikes this year, though we continue to expect only two. 

Samuel Tombs (UK Economist)U.K.

25 Feb 2022 The Economy will Stagnate if Energy Prices Stay this High

  • This week's surge in energy prices, if sustained, will boost the CPI by an extra 1.5 percentage points.
  • Households' real disposable incomes now are set to fall by about 2.2% this year, the most since WW2.
  • Below-trend GDP growth lies ahead, which will obviate the need for much higher interest rates.

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.

20 Jan 2022 The MPC will React Immediately to December's Blowout CPI Figure

  • We are bringing forward our forecast for the next two increases in Bank Rate, following December's CPI data.
  • While food, energy and goods prices are mainly to blame for high inflation, services inflation has risen too.
  • CPI inflation, however, will fall sharply in H2 and should be below target in 2023, curtailing the hiking cycle.

Samuel Tombs (UK Economist)U.K.

6 Jan 2022 What Would Government Energy Price Intervention Mean for Inflation

  • The default tariff energy price cap looks set to rise by 47% in April, pushing up CPI inflation to 6.2%.
  • The rise will be larger, if suppliers are immediately compensated for acquiring failed competitors' customers.
  • Removing VAT would limit the inflation peak to 6.0%; a supplier loan scheme could have a bigger impact.

Samuel Tombs (UK Economist)U.K.

4 Jan 2022 Forecast Review: Q1 GDP to be no Higher than in Q4, due to Omicron

  • Consumer caution in response to Omicron points to a near-1% fall in GDP between November and January.
  • Surging energy prices have forced us to revise up our forecast for this year's peak rate of CPI inflation to 6.0%.
  • The MPC, however, likely will wait until March to hike rates again, given the large hit to activity from Omicron

Samuel Tombs (UK Economist)U.K.

17 Dec 2021 The MPC will Give the Economy Breathing Space Before Hiking Again

Markets now expect the MPC to hike Bank Rate to 0.50% in February, following today's surprise hike.

Most members, however, thought the decision was "finely balanced" and see a "modest" tightening ahead.

Omicron won't just have short-term effects if the MPC hikes again and pushes firms over the edge.

Samuel Tombs and Gabriella DickensU.K.

16 Dec 2021 Subdued Services Inflation Gives the MPC Time to Wait for Omicron

November's 5.1% CPI inflation rate was 0.6pp above the forecast made by the MPC only last month...

...But high inflation is due to surging energy and goods prices; underlying services inflation remains subdued.

We expect the headline rate to peak at 6.0% in April, but then to fall sharply, slipping below-target in 2023.

Samuel Tombs and 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.

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.

1 Nov 2021 Forecast Review: Rate Hikes Loom Closer, But Not This Week

  • The near-term outlook for GDP has worsened, but 2022 looks a little brighter in the wake of the Budget.
  • Higher energy prices mean we have revised up our forecast for CPI inflation in 2022 to 3.6%, from 3.4%.
  • We now expect two rate hikes, not one, in the next 12 months, but still anticipate no change this week.

Samuel Tombs (UK Economist)U.K.

27 Oct 2021 Inflation Expectations Data Leave Room for the MPC to Prevaricate

  • Households' medium-term inflation expectations fell by 0.1pp to 3.7% in October, according to YouGov/Citi.
  • Nearly all the rise in expectations can be explained by current inflation rates; no sign of de-anchoring.
  • Manufacturing output isn't that sensitive to energy prices; we continue to expect modest growth in Q4.

Samuel Tombs and Gabriella DickensU.K.

  Publication Filters

Change View: List   Small Grid  

Filter by Keyword

Filter by Publication Type

Filter by Author

Global Publications Only

Filter by Date
(6 months only; older publications available on request)

  Quick Tag Filters

Consistently Right
Access Key Enabled Navigation
Keywords for: U.K. Documents

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