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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gdp data

25 Nov 2022 UK Monitor Why Do We Expect Unemployment to Rise Sooner than Official Forecasters?

Past recessions show a much shorter lag between falling GDP and employment than the OBR and BoE now expect.

Vacancy data likely provide false comfort; they didn't forewarn of declining employment in early 2008.

Survey measures of employment have fallen sharply; the big corporate financing shock points to layoffs.

Gabriella DickensU.K.

24 Nov 2022 UK Monitor PMI Data Still Point to a Recession and Intense Price Pressures

  • S&P's survey points to another 0.2% q/q drop in GDP in Q4 and the likelihood of a faster decline in Q1.
  • The employment index remained slightly above its long-run average, but it tends to lag the PMI.
  • Output prices still are rising too fast for the MPC to tolerate, but leading indicators point to a slowing soon.

Gabriella DickensU.K.

23 Nov 2022 UK Monitor The Chances of Public Borrowing Falling Below 3% of GDP are Remote

  • Borrowing undershot the consensus in October due to the timing and under-recording of energy support.
  • The OBR's GDP forecasts assume an implausibly low saving rate and too rapid productivity growth...
  • ...Plans for very tight public spending won't be stuck to; borrowing eventually will settle at about 4% of GDP.

Samuel Tombs (UK Economist)U.K.

14 Nov 2022 UK Monitor Britain will Be the First into Recession, and the Last One Out

  • The U.K. is the only G7 country in which GDP fell in Q3
    and has never recovered to its pre-Covid peak.
  • Households’ real spending will keep falling until the end of 2023, as fiscal and monetary headwinds intensify.
  • Higher interest rates will weigh on business investment and trigger a sharp downturn in residential investment.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. GDP, September & Q3

  • In one line: Contraction makes the U.K. a global outlier.

Samuel Tombs (UK Economist)U.K.

9 Nov 2022 UK Monitor Construction Output will Fall Twice as Sharply as GDP Next Year

  • The construction sector continued to recover in Q3, as supply constraints and labour shortages eased...
  • ...But we doubt it will defy gravity for long, given the surge in borrowing costs and the looming fiscal squeeze.
  • Given the pro-cyclical nature of construction output, we expect it to fall by 3% in 2023, twice as much as GDP.

Gabriella DickensU.K.

8 Nov 2022 UK Monitor September GDP Data to Reveal a Recession-Bound Economy

  • We think GDP dropped by 0.5% month-to-month in September; business surveys were very weak...
  • ...And the extra public holiday for the Queen’s funeral likely was more damaging than the Jubilee holiday.
  • A peak-to-trough fall in GDP of about 2.3% likely lies ahead, similar in scale to the early 1990s recession.

Samuel Tombs (UK Economist)U.K.

7 Nov 2022 UK Monitor Forecast Review, Same Dismal Outlook, but a Different Mix of Drivers

  • The U-turn in the direction of fiscal policy has offset the better news on the outlook for borrowing costs.
  • Plausible assumptions suggest Autumn Statement measures will inflict a 0.3% blow to GDP in 2023/24.
  • A halving of energy price support for households in April would raise the path for CPI inflation by about 2.0pp.

Samuel Tombs (UK Economist)U.K.

25 Oct 2022 UK Monitor PMI Data Show a Deepening Downturn, but Price Rises Remain too Rapid

  • October’s PMI data point to a worsening recession; a 0.5% quarter-on-quarter drop in Q4 GDP looks likely.
  • Price rises are slowing, but remain too brisk for the MPC to take breath; we look for a 75bp hike next week.
  • Further falls in interest rate expectations will weigh on sterling now the fiscal credibility gap has largely gone.

Samuel Tombs (UK Economist)U.K.

18 Oct 2022 UK Monitor The Chancellor has Picked the Low-Hanging Fruit; Further Cuts will Hurt

  • The new Chancellor’s quick actions have reduced the outlook for public borrowing in 2025/26 by £35B...
  • ...But he needs to find at least £39B more savings to ensure the debt-to-GDP ratio is falling in three years’ time.
  • CPI inflation likely increased to 10.1% in September, from 9.9% in August, slightly above the consensus, 10.0%.

Samuel Tombs (UK Economist)U.K.

13 Oct 2022 UK Monitor The Developing Recession is More Important for Gilts than the LDI Crunch

  • The outlook for gilt yields beyond this month depends on the economy’s performance, not LDI fund turmoil.
  • August’s GDP data show a recession was underway before the surge in economy-wide borrowing costs.
  • Inflation pressures will be extinguished by the recession; the BoE doesn’t need to go into overdrive.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. GDP, August

  • In one line: A big step closer to a recession.

Samuel Tombs (UK Economist)U.K.

10 Oct 2022 UK Monitor August GDP and Labour Market Data to Point to Stagnation

  • We look for a small 0.1% month-to-month rise in GDP
    in August; that’s probably the last rise for this year.
  • The single-month measure of employment fell in June and July, but surveys signal modest growth in August.
  • Recent wage indicators have painted a mixed picture; expect year-over-year growth to rise only modestly.

Samuel Tombs (UK Economist)U.K.

3 Oct 2022 UK Monitor GDP Won't Top its Pre-Covid Peak Any Time Soon

  • The economy’s performance since Covid now looks even worse, after revisions to the national accounts.
  • Business investment rebounded in Q2, but the recent rise in borrowing costs points to a sharp fall next year.
  • Households’ real disposable incomes looks set to fall by a further 1% in 2023, dragging spending down.

Samuel Tombs (UK Economist)U.K.

26 Sept 2022 UK Monitor Mini-Budget Measures Won't Revitalise the Economy Next Year

  • Tax cuts which disproportionately benefit the top 1% of earners will do little to boost demand.
  • Most households are worse off, because the associated depreciation of sterling will raise the price level by 1.5%.
  • Mr. Kwarteng likely will impose tough spending limits in the Budget, to try to reverse the jump in gilt yields. 

Samuel Tombs (UK Economist)U.K.

23 Sept 2022 UK Monitor MPC Likely to Stick to Another 50bp Hike in November, Despite Tax Cuts

  • The improved near-term outlook for CPI inflation has left the MPC less anxious about second-round effects.
  • The MPC is awaiting more details on fiscal policy; a 75bp hike in November can't be ruled out...
  • ...But the proposed tax cuts will do little to boost GDP, and spending might be cut; we still expect a 50bp hike.

Samuel Tombs (UK Economist)U.K.

16 Sept 2022 UK Monitor The Improved Inflation Outlook Implies the MPC will Stick to a 50bp Hike

  • We think the MPC will raise Bank Rate by 50bp next week, despite other central banks rushing ahead...
  • ...Q3 GDP is set to undershoot the MPC’s latest forecast, while the inflation outlook has improved greatly.
  • Proposed tax cuts are too small to move the inflation needle, and likely will be partly funded by spending cuts.

Samuel Tombs (UK Economist)U.K.

14 Sept 2022 UK Monitor Wage Growth Remains too High for the MPC, But that will Change in 2023

  • Employment has stopped rising, but labour market slack hasn't accumulated, due to increasing inactivity.
  • We expect labour demand to remain flat but the workforce to grow, as immigration and participation recover.
  • For now, wage growth is too hot for the MPC, but building slack and falling CPI inflation will slow it in 2023.

Samuel Tombs (UK Economist)U.K.

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