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 demand

12 May 2022 Negligible Employment Growth in Q1, Despite Strong Surveys?

The LFS measure of employment was essentially unchanged in Q1, despite the strength implied by surveys.

But the unemployment rate probably fell to a 47-year low of 3.7%, due to a contraction in the workforce.

Headline wage growth likely edged up, but remained well below CPI inflation; this gap will persist.

Gabriella DickensU.K.

11 May 2022 Fresh Measures to Support Households are Coming Soon

Local election results imply the Tories are not on track to win in 2024, unless they turn the economy around.

Currently planned measures to support households in July and October are too small to move the dial.

Bringing forward April 2023's inflation-linked rise in benefits to October would be simple and well-targeted.

Samuel Tombs (UK Economist)U.K.

3 May 2022 Forecast Review, The Near-Term Outlook for GDP Has Worsened

The near-term outlook for households' real disposable income looks bleak; we still expect GDP to drop in Q2.

A recession, however, isn't our base case; people have ample scope to draw on savings and to borrow more.

We now Bank Rate to top out at 1.25% this year, not 1.00%, but still think markets have lost the plot.

Samuel Tombs (UK Economist)U.K.

27 Apr 2022 Public Borrowing Likely to Exceed the OBR's Forecast This Year

The estimate of public borrowing in 2021/22 almost certainly will be revised down over the coming months.

But we think public borrowing is on course to overshoot the OBR's forecast in 2022/23 and beyond.

The OBR's assumption that productivity will grow at double the pace seen in the 2010s is implausible.

Samuel Tombs (UK Economist)U.K.

25 Apr 2022 Consumers Must Draw on Savings Soon for a Recession to be Averted

March's retail sales figures were a wake-up call for investors; households are struggling to tread water.

Consumers' confidence weakened further in April and now is only a touch above its all-time low.

We still expect a recession to be avoided, but the risk will weigh on the MPC's forthcoming decisions.

Samuel Tombs (UK Economist)U.K.

22 Apr 2022 Which of the Conflicting Indicators of Employment Should Be Believed?

The upward trend in the PAYE measure of employees is more plausible than the flat trend presented by the LFS.

Very strong survey indicators might reflect rising average hours and likely are insensitive to rising quits.

Employment growth looks set to slow from Q2, due to the rise in NICs and weaker demand.

Gabriella DickensU.K.

19 Apr 2022 The Recent Strength in House Price Growth Won't Last Much Longer

House price growth was strong in Q1, but will now slow, due to rising mortgage rates and falling real incomes.

Several timely indicators of demand, including the RICS new buyer enquiries balance, are starting to soften.

House price growth looks set to slow to 4.5% this year, and mortgage approvals will fall to pre-Covid levels.

Gabriella DickensU.K.

UK Datanote: U.K. Labour Market Data, February/March 2022

  • In one line: The recovery in employment is back on track.

Samuel Tombs (UK Economist)U.K.

13 Apr 2022 A Recovery in the Workforce will Limit Wage Pressures in 2022

Employment started to rise again in the three months to February, having fallen in December and January.

The workforce should start to recover this year, reflecting a decline in inactivity and a rise in immigration.

Alongside slower labour demand growth this should mean wages continue to rise more slowly than prices.

Samuel Tombs (UK Economist)U.K.

7 Apr 2022 February Data to Show the Recovery in Employment Is Back on Track

We look for a three-month-on-three-month rise in employment of about 30K in February.

Another cohort with a high employment rate left the sample, but surveys signal solid underlying momentum.

The PAYE measure of median pay and settlements data, however, suggest wage growth stayed subdued.

Gabriella DickensU.K.

5 Apr 2022 No Recession Signalled by Financial Market Indicators

The U.K. yield curve has not inverted and inversion is not a reliable bellwether of U.K. recessions.

Equity prices for consumer-facing companies have fallen sharply, but not yet to recession levels.

The oil price has been this high before without triggering a downturn, and GDP is less energy-intensive now. 

Samuel Tombs (UK Economist)U.K.

1 Apr 2022 Don't Mistake the Swift Recovery in GDP for Private Sector Strength

  • GDP has returned to its pre-recession level faster than after the four previous downturns...
  • ...But this strength reflects high government spending; "private-sector" GDP was nearly 3% below its peak.
  • Sub-par growth in households’ financial wealth adds to the list of reasons to expect little dis-saving ahead.

Samuel Tombs (UK Economist)U.K.

29 Mar 2022 The Momentum Behind the Recovery in Q1 won't be Sustained

  • The latest data suggest that GDP increased by 0.9% in Q1, despite the Omicron hit at the turn of the year...
  • ...But lower health spending, an extra bank holiday and falling real incomes will weigh on the recovery in Q2.
  • The MPC, therefore, likely will refrain from raising Bank Rate later this year, after a final hike to 1.00% in May.

Samuel Tombs (UK Economist)U.K.

28 Mar 2022 Does the Plunge in Confidence Signal an Imminent Recession?

  • A recession has ensued on four of the five past times when consumers' confidence is as low as it is currently.
  • The outlook for households' real disposable income is ghastly; we now expect a 2.5% y/y drop in 2022...
  • ...But if employment keeps rising, people should be will- ing to draw on savings to maintain their real spending.

Samuel Tombs (UK Economist)U.K.

21 Mar 2022 The Housing Market's Strong Start to the Year will Not Endure

  • House prices appear to have risen further in Q1, but timely data suggest that buyer demand now is cooling.
  • The outlook for rising mortgage rates, falling real incomes and low confidence does not bode well.
  • We expect year-over-year growth in house prices to slow from its current 10% rate to 3.5% by year-end.

Gabriella DickensU.K.

18 Mar 2022 Markets Likely to be Caught on the Hop Again by the MPC's Dovishness

  • Markets' rate expectations fell sharply in response to the crumbling of hawkish dissent on the Committee.
  • The MPC now is more worried about the impact of high inflation on demand than on inflation expectations.
  • We continue to expect the MPC to stop hiking this year once Bank Rate has reached 1%.

Samuel Tombs (UK Economist)U.K.

16 Mar 2022 The Workforce will Recover this Year, Keeping Wage Pressures in Check

  • Employment is trending up gradually, not falling as the LFS data imply or surging as the PAYE figures indicate.
  • Growth in the workforce should rise this year, as inactivity declines and immigration recovers...
  • ...This will slow the tightening of the labour market and ensure wages continue to rise more slowly than prices.

Samuel Tombs (UK Economist)U.K.

UK Datanote: U.K. Labour Market Data, January/February 2022

  • In one line: Still tightening, despite the small drop in employment.

Samuel Tombs (UK Economist)U.K.

10 Mar 2022 The MPC will Hike Bank Rate Again Next Week, but Strike a Cautious Tone

  • Markets are more stressed and consumers' confidence is lower than when the MPC has hiked rates before...
  • ...But with Q1 GDP looking better than feared and inflation set to soar, a 25bp rate rise next week is very likely.
  • A 50bp hike is possible if Friday's inflation expectations data are scary, but the MPC won't want to shock now.

Samuel Tombs (UK Economist)U.K.

4 Mar 2022 No Sign Yet of Worrying Second- Round Effects from High Inflation

  • MPC members disagree over whether wages already are responding to the surge in CPI inflation.
  • Wage rises are becoming more widespread—hence the jump in some metrics—but big rises remain rare.
  • The plunge in consumers' confidence signals most workers expect pay to fail to respond to high inflation.

Samuel Tombs (UK Economist)U.K.

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