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.

europe Money

3 Aug 2022 UK Monitor Surging Mortgage Rates Point to an Outright Drop in House Prices

House purchase demand is falling quickly in response to the jump in mortgage rates and drop in real incomes.

New mortgage rates look set to rise further in Q3, greatly weighing on approvals.

A contraction in supply, however, will prevent a slump in prices; we still forecast a modest 2% decline in H2 2022.

Gabriella DickensU.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.

UK Datanote: U.K. Money & Credit, June 2022

  • In one line: Households are now saving less and borrowing more in order to sustain their real consumption.

Samuel Tombs (UK Economist)U.K.

12 July 2022 Business Investment Still Looks Set to Rise, Reducing Recession Risks

Business investment fell in Q1, partly due to supply disruption preventing orders being fulfilled.

But supply shortages are easing, and with Brexit and Covid uncertainty dissipating, capex should rebound.

A renewed rebound in business investment will support GDP growth in the second half of the year.

Gabriella DickensU.K.

4 July 2022 Households' Didn't Reduce their Saving Enough in Q2 to Stop Spending Falling

Households have not saved sufficiently less in Q2 to offset the hit to spending from the huge real income drop.

The high level of ad-hoc mortgage and unsecured debt repayments shows households remain cautious.

Households usually slash their saving rate when total financial wealth is growing quickly; it is barely rising now.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Money & Credit, May 2022

  • In one line: Households’ cautious saving and borrowing behaviour points to lower real expenditure in Q2.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Money & Credit, April 2022

  • In one line: Households still appear unwilling to draw on their savings to support spending 

Samuel Tombs (UK Economist)U.K.

5 May 2022 Households are Showing Little Sign of Riding out the Real Income Shock

Households must save less—or borrow more—to the tune of £9B in Q2, in order for real spending not to fall. 

That is possible, given that "excess savings" are £186B and consumer credit is £25B below its peak.

But people didn't draw on savings in March and still are reluctant to borrow, so GDP looks set to dip in Q2.

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.

30 Mar 2022 Households Still Aren't Drawing on Savings, But Borrowing is Picking Up

  • Slowing money supply growth and households' continued reluctance to deplete savings are worrying signs...
  • ...But real expenditure could still rise this year if the recovery in unsecured borrowing gathers momentum.
  • Mortgage approvals have further to fall this year, but remortgaging activity should remain strong.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Money & Credit, February 2022

  • In one line: Sluggish money growth and continued reticence to spend savings point to a slowing recovery.

Samuel Tombs (UK Economist)U.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.

UK Datanote: U.K. Money & Credit, January 2022

  • In one line: Slowing money supply growth should ease concerns about ingrained high inflation.

Samuel Tombs (UK Economist)U.K.

21 Feb 2022 The Recovery in Households' Spending is Starting to Flag

  • Retail sales in January were still 0.5% below their Q4 average, despite rising by nearly 2% from December.
  • Omicron weighed on sales at the start of the month, but the real income squeeze also is becoming a factor.
  • Households' real spending will rise further, as savings are drawn upon, but retailers don't stand to benefit.

Samuel Tombs (UK Economist)U.K.

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

  • In one line: Households are starting to draw on their excess savings to support consumption.

Samuel Tombs (UK Economist)U.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.

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