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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fuel

3 Dec 2021 If Omicron Were Vaccine-Resistant, What Would the MPC do Next?

  • The MPC would ease monetary policy again in the unlikely event that another lockdown is imposed.
  • Fiscal policy would be less supportive than in previous lockdowns; new curbs would dampen inflation.
  • Negative rates are in the toolkit and are preferred to more QE; Bank Rate likely would be cut to -0.25%.

Samuel Tombs (UK Economist)U.K.

22 Nov 2021 Q4 Retail Sales won't be Stellar, Despite October's Good Start

  • October's rise in retail sales volumes was driven solely by people buying Christmas presents earlier than usual.
  • Consumers' confidence recovered in November, but still is below-average, and will drift down over the winter.
  • A large minority of people remain fearful of Covid; rising cases likely will instil greater caution over the winter.

Samuel Tombs (UK Economist)U.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.

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.

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.

8 Nov 2021 September GDP will Give the MPC Further Pause for Thought

  • We think GDP merely held steady in September, undershooting the consensus and the BoE's forecast.
  • Data from other countries show that industrial pro- duction was impeded by component shortages.
  • Car sales fell sharply in September, while the "stay- cationing" boost to the hospitality sector ended.

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.

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.

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.

21 Oct 2021 Plenty of Ammo for the MPC's Doves in September's CPI Report

  • The MPC's preferred measure of underlying services inflation merely matched its 2010s average in September.
  • CPI inflation is on course to rise to a peak of about 4.8% in April, from 3.1% in September...
  • ...But the rise will be driven largely by higher energy prices; core inflation should remain well-behaved.

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.

14 Oct 2021 Recovery Sluggish Even Prior to the Withdrawal of Fiscal Support

  • August's 0.4% m/m rise in GDP sets it up for a 1.5% q/q rise in Q3, below the 2.1% expected by the MPC.
  • Health sector output probably rebounded in September, but the "staycationing" boost likely faded.
  • We're lowering our Q4 GDP forecast to 1.0% q/q, from 1.2%; fiscal, fuel and energy headwinds are strong.

Samuel Tombs (UK Economist)U.K.

5 Oct 2021 Covid Didn't Flare up in September, but the Winter Still Brings Risks

  • The recent fall in hospital admissions suggests that the pandemic was on the retreat in September...
  • ...But warmer-than-usual weather and fuel shortages have helped to reduce transmission temporarily.
  • The combination of fading vaccine effectiveness and limited booster jab plans suggests Q4 will be worse.

Samuel Tombs (UK Economist)U.K.

4 Oct 2021 Forecast Review: One Rate Hike in 2022 Now Looks Likely

  • We have lowered our forecast for Q4 GDP, due to the impaired supply of fuel and industrial inputs.
  • Surging energy prices have forced us to hike our forecast for CPI inflation in 2022 to 3.4%, from 2.5%.
  • We now expect the Committee to hike Bank Rate in Q2 2022, but we don't buy investors' hawkish view.

Samuel Tombs (UK Economist)U.K.

1 Oct 2021 2022 Rate Hike Now Likely, Following Big GDP Revisions

  • The shortfall in GDP in July from its pre-Covid peak has been revised to just 1.3%, from 2.5% previously.
  • Future growth, however, will be weak; both government spending and households' incomes will fall...
  • ...So the MPC can take its time; we now expect a Q2 rate rise, but then a 12-month delay until the next hike.

Samuel Tombs (UK Economist)U.K.

30 Sept 2021 Consumers are Missing in Action, will they Finally Stop Saving in Q4

  • Households continued to add to their stock of savings at a faster rate in August than before Covid.
  • Unsecured lending rose only modestly too; lower confi- dence in September points to still-subdued spending.
  • Surging energy prices mean we are lifting our 2022 CPI inflation forecast to 3.4%, from 3.2% two weeks ago.

Samuel Tombs (UK Economist)U.K.

28 Sept 2021 Look to the Services Sector for the Adverse Impact of Fuel Shortages

  • Panic-buying of fuel likely will fade soon; no sign yet of shortage fears spreading to food or other goods...
  • ...But for a period, people likely will reduce trips to purchase non-essential goods and services.
  • The silver lining, however, has been a softening of the government's visa policies; probably more to come.

Samuel Tombs (UK Economist)U.K.

14 Sept 2021 The Consensus for August CPI Inflation Looks too Low

  • We think CPI inflation leapt to 3.1% in August, from 2.0% in July, above the 2.9% consensus.
  • Core inflation likely jumped on the anniversary of the Eat Out to Help Out Scheme...
  • ...But it also probably was boosted by abnormally large increases in used car and other goods prices.

Samuel Tombs (UK Economist)U.K.

17 Aug 2021 CPI Inflation Likely Fell Sharply in July, Taking the Consensus by Surprise

  • CPI inflation probably declined to 2.1% in July from 2.5% in June, below the consensus, 2.3%.
  • Clothing prices appear to have fallen sharply, as usual; they dropped only marginally a year ago.
  • Surveys suggest the pace of increases in catering services prices has slowed down.

Samuel Tombs (UK Economist)U.K.

12 Aug 2021 Will Car Sales Remain at Q2's Elevated Level?

Car demand surged in Q2, as easing Covid-19 restrictions boosted consumers' confidence.
But shortages of key components have limited the supply of new cars; used car sales have surged.
Used car sales look set to remain elevated this year, pushing up prices.

Samuel Tombs (UK Economist)U.K.

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