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.

labour

7 Dec 2021 Real-Time Data Show Clear Hit to Services Firms from Omicron

  • Omicron fears already have led people to travel and visit restaurants, shops and cinemas less often.
  • Booster jabs are containing hospital admissions, but people still have good reasons to avoid being infected.
  • While boosters and school holidays will weigh on cases, Omicron and Christmas festivities will keep R>1.

Samuel Tombs (UK Economist)U.K.

24 Nov 2021 Is Mr. Sunak's Fund for Future Tax Cuts Already Under Threat?

  • Rising interest payments are slowing the rate that public borrowing is falling.
  • Fiscal headroom probably will be just half that assumed in the October Budget…
  • …But Mr. Sunak still will have a free hand in signing off pre-election tax cuts in 2023.

Samuel Tombs (UK Economist)U.K.

23 Nov 2021 MPC Members are Keeping their Options Open, No Matter the Data

  • MPC members Bailey and Pill are sitting on the fence, despite last week's upside data surprises.
  • In a weekend paper interview, the Governor highlighted the public sector's role in driving the recovery.
  • We put the odds of a December rate hike at 60%, well below the 80-to-90% range priced by markets.

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.

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.

UK Datanote: U.K. Labour Market Data, September/October 2021

  • In one line: Payroll data suggest unemployment hasn’t risen post-furlough.

Samuel Tombs (UK Economist)U.K.

16 Nov 2021 Exports are Still in the Doldrums; Brexit Clearly is to Blame

  • U.K. exports in Q3 were 14% below their 2018 average, a larger shortfall than in any other G7 economy.
  • It's not just services exports; U.K. goods exports are well below their pre-Covid level; Brexit is to blame.
  • Several potential further headwinds loom, including the risk of further trade barriers from the EU.

Gabriella DickensU.K.

12 Nov 2021 Weak GDP Growth in Q3 Leaves the U.K. as the G7's Straggler Again

  • U.K. GDP was 2.1% below its Q4 2019 level in Q3, exceeding the shortfalls seen in other G7 counties.
  • Households have continued to spend more cautiously than those abroad; high virus levels are partly to blame.
  • Brexit also has contributed to the continued underper- formance; exports were 17% below their 2019 average.

Samuel Tombs (UK Economist)U.K.

11 Nov 2021 October Payroll Employee Data to Help Gauge Furlough Scheme Fallout

  • Payroll employee numbers likely increased again in October, but not quite as strongly as in Q3.
  • The data, however, will not gauge underemployment; October's LFS data, released in December, remain key.
  • The recent drop in Covid-19 cases has largely been driven by school holidays; expect a renewed rise soon.

Gabriella DickensU.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.

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.

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.

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.

29 Oct 2021 Higher Government Spending to Force the MPC's Hand, but Not Yet

  • The MPC's view the output gap has closed means it must counter plans for higher government spending.
  • But the Committee can wait until 2022 to act; the recovery is faltering, and underlying inflation is not high.
  • The MPC will see key jobs data if it waits until December; higher rates are coming, but not just yet.

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.

25 Oct 2021 Where Does Last Week's Data Deluge Leave the MPC?

  • Markets are pricing-in a 65bp rise in Bank Rate by March and expect the first hike to come next week...
  • ...But falling consumer confidence, low pay settlements and rising Covid cases strengthen the case for patience.
  • November is "live", but markets' conviction is too strong; potential swing voters on the MPC have been very

Samuel Tombs (UK Economist)U.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.

20 Oct 2021 Backdrop of Rising Borrowing Costs Will Force Mr. Sunak to be Cautious

  • The OBR likely will revise smaller its "scarring" estimate only to 2.5% of GDP, from 3.0% previously.
  • The resulting uplift to future tax revenues will be offset by higher projections for interest payments.
  • Mr. Sunak will have little, if any, headroom in meeting his target for a balanced current budget in three years' time.

Samuel Tombs (UK Economist)U.K.

19 Oct 2021 Here's What Governor Bailey Actually Said

  • Are you sure Governor Bailey said something new on Sunday? Governor Bailey thought not.
  • The statement "we will have to act" was qualified; medium-term inflation expectations need to be worrying.
  • Confidence has fallen in response to rising inflation expectations;  workers don't expect wages to keep pace.

Samuel Tombs (UK Economist)U.K.

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