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.

financial conditions

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.

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.

15 Nov 2021 October's CPI Inflation Print Likely Will Exceeded the Consensus

  • Energy prices likely were the key driver of higher CPI inflation in October, but the core rate probably rose too.
  • Used car prices rocketed again, while data from the BRC point to a chunky rise in clothing prices.
  • Hospitality firms probably raised prices in response to the VAT hike; the boost is uncertain but likely large.

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.

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.

7 Oct 2021 Could the Economy Withstand the Rate Hikes Markets Expect?

  • Markets expect interest rates to rise more in the next 15 months than in any other period since 2007.
  • Firms are well placed to cope, and the effective interest rate on all mortgage debt would rise only slowly...
  • ...But higher new mortgage rates would hit spending via lower house prices or higher mortgage payments.

Samuel Tombs (UK Economist)U.K.

6 Oct 2021 Net Trade will Return to Depressing GDP Growth Next Year

  • Revisions to Q2 GDP data brightened the picture of the economy's recent trade performance...
  • ...But Brexit still is preventing U.K. exporters from benefiting fully from the upswing in global trade.
  • The return of the structural deficit in services trade will cause net trade to weigh on GDP growth in 2022.

Samuel Tombs (UK Economist)U.K.

23 Sept 2021 Underlying Wage Growth will Slow, Easing the Pressure on the MPC

  • The ONS estimates that underlying year-over-year growth in wages was between 3.6% and 5.1% in July...
  • ...We expect an increase in labour market slack, post-furlough, to push this rate down to about 3.2%.
  • Employers will pass on higher NICs rates to staff, while public sector pay will rise only modestly next year.

Samuel Tombs (UK Economist)U.K.

16 Sept 2021 Higher CPI Inflation Still Due to Only a Few Components

  • The month-to-month rise in the core CPI in August was only 0.1pp bigger than the average in the 2010s.
  • Used cars and computer games drove the large monthly gain; no sign of broad-based price increases.
  • Higher energy prices will push up the headline rate to 4% in Q4 and Q1, but the MPC needn't blink.

Samuel Tombs (UK Economist)U.K.

1 Sept 2021 Households are Prioritising Debt Repayments Over Having Fun

  • Households' stock of excess savings rose in July to 8.3% of 2020 GDP, after another cautious month.
  • The proportion of credit card debt repaid rose to a record high; ad hoc mortgage payments were high too.
  • Businesses aren't borrowing either, though capex still looks set to recover from rock-bottom levels in 2022.

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.

30 July 2021 June's Money Data Point to Increased Consumer Caution

The slowdown in consumer credit gross lending in June suggests monthly GDP growth slowed.
Households remained cautious; last month liquid assets increased at a faster rate than pre-Covid.
Businesses increased their net external finance for the first time since February; a positive sign for capex.

Samuel Tombs (UK Economist)U.K.

28 July 2021 Brexit is Limiting Trade and will be a Key Constraint on the Recovery

On the face of it, May's trade data suggest Brexit's adverse impact has faded considerably...
...But the U.K. is not benefiting from the global upswing in trade to the same extent as its peers.
Brexit is one reason why we expect the recovery in GDP to slow as it approaches its pre-Covid level.

Samuel Tombs (UK Economist)U.K.

25 June 2021 The First Rate Hike Still Looks Distant, after June's MPC Minutes

Investors hoping for a more hawkish tone from the MPC were left disappointed yesterday.

Samuel Tombs (UK Economist)U.K.

25 May 2021 Surveys Point Unambiguously to Higher Services Inflation Ahead

We were particularly struck last week by the absence of a jump in prices up on the reopening of non-essential shops and some services businesses in April.

Samuel Tombs (UK Economist)U.K.

24 May 2021 What will Follow Households' Summer Spending Spree?

Financial markets are relatively upbeat on the outlook for British retailers. The FTSE All-Share Retailers Index closed last week 27% above its 2019 average, greatly outperforming the total FTSE All- Share Index, which has only just recovered to its 2019 level.

Samuel Tombs (UK Economist)U.K.

17 May 2021 April CPI Inflation to Exceed the Consensus

April's consumer prices figures will be closely watched by markets on Wednesday for signs that prices are surging as businesses reopen, especially in light of the big jump in U.S. CPI inflation reported last week.

Samuel Tombs (UK Economist)U.K.

14 May 2021 Britain is Missing Out on the Global Trade Upswing, Due to Brexit

A superficial glance at the U.K.'s trade data suggests that the Brexit bullet has been miraculously dodged.

Samuel Tombs (UK Economist)U.K.

11 May 2021 Sterling's Rally Looks Short-Sighted; IndyRef2 Still More Likely than Not

Markets responded with mild relief to last week's election results, with sterling rising by 1% to $1.41 on Monday, its highest level since February 25.

Samuel Tombs (UK Economist)U.K.

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