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 force

17 Sept 2021 House Prices Should Recover Steadily in 2022 after Q4's Fall

  • Year-over-year growth in house prices slowed in July, following the tapering of government support.
  • Expect a further slowdown in Q4, when the SDLT threshold will return to £125K and real incomes will fall.
  • The outlook for 2022, however, is brighter; falling mortgage rates and tight supply will support prices.

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.

15 Sept 2021 Wages Likely Won't Match Inflation as Slack Builds Post-Furlough

  • Payroll employee numbers returned in August to their pre-Covid peak, but will dip in Q4, after furlough ends.
  • We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; slack within firms will build too.
  • Three-month-on-three-month annualised growth in wages fell to 3.2% in July; slack will keep it in check.

samuel tombs (UK Economist)U.K.

UK Datanote: U.K. Labour Market Data, July & August 2021

  • In one line: Not yet tight enough for strong underlying wage growth; slack to increase in Q4.

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.

13 Sept 2021 Covid Put the Brakes on July GDP; Expect a Lingering Drag This Year

  • Surging Covid-19 cases largely were responsible for the near-stagnation of GDP in July.
  • The virus no longer is driving labour shortages, but many remain fearful and will spend less if it picks up.
  • We still look for quarter-on-quarter growth in 1.5% in Q3, half the rate expected by the MPC.

samuel tombs (UK Economist)U.K.

10 Sept 2021 Hidden Slack will Rise More than the Unemployment Rate, Post-Furlough

  • The number of workers on furlough decreased again in July, as government contributions were tapered...
  • ...But usage remains high in sectors that already have fully recovered, and among financially-weak SMEs.
  • We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; hidden slack will rise much more.

samuel tombs (UK Economist)U.K.

8 Sept 2021 The MPC Won't Hike Bank Rate Just After a Big Rise in NICs

  • Markets still expect the MPC to hike rates in Q2 2022, despite surprise plans to lift national insurance in April.
  • The tax hike will defer a full recovery in households' spending to the second half of next year.
  • The plans imply the Treasury does not expect the OBR to turn upbeat on the medium-term economic outlook.

samuel tombs (UK Economist)U.K.

6 Sept 2021 Forecast Review: The Consensus is Still too Upbeat on Q3 GDP

  • From now on, the U.K. Monitor on the first Monday of each month will summarise recent forecast changes.
  • We now think GDP flatlined in July, so our Q3 fore- cast, 1.5% q/q, is well below the consensus, 2.4%.
  • Our 3.7% forecast for the CPI inflation in Q4—probably the peak—is below the MPC's new 4.0% estimate.

samuel tombs (UK Economist)U.K.

26 Aug 2021 Labour Shortages will be a Long- Lasting Constraint on GDP

  • Businesses are reporting low inventory in relation to demand, but shops remain well-stocked for now.
  • Labour shortages should fade now that self-isolation rules have eased and the holiday season is nearly over.
  • The workforce, however, is 2.2% below its pre-Covid trend; migration and participation won't fully recover.

samuel tombs (UK Economist)U.K.

25 Aug 2021 Don't Extrapolate the Recent Favourable Trend in Public Borrowing

  • The margin by which public borrowing undershoots the OBR's forecast will narrow over coming months...
  • ...Interest payments will soar, while GDP growth in Q3 and Q4 will fall short of the OBR's expectations.
  • The OBR's scarring judgement looks sound; productivity and participation have been lower than expected.

samuel tombs (UK Economist)U.K.

24 Aug 2021 The Belated Shift Down in the PMIs Highlights a Drawn-out Recovery

  • August's sharp fall in the composite PMI brings it in line with other indicators, which weakened in July.
  • In fact, GDP likely rose at a faster rate in August than July, though it won't match its peak until year-end. 
  • Output prices reportedly rose at a slower pace in August, tentatively supporting the "transitory" take.

samuel tombs (UK Economist)U.K.

18 Aug 2021 Employment has Risen Briskly, but will Fall Back when Furlough Ends

  • Employee numbers have rebounded since the spring, but total employment is lagging behind.
  • Vacancies are high, but are concentrated in different sectors to those which will see post-furlough layoffs.
  • High inflation and 4-to-5% unemployment didn't lift wage growth in 2017, and probably won't this time.

samuel tombs (UK Economist)U.K.

UK Datanote: U.K. Labour Market Data, June/July 2021

  • In one line: Recent employment gains likely will be reversed when the furlough scheme ends.

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.

11 Aug 2021 Will Sterling Still be 2021's Best Performing Currency by Year End?

By the autumn, vaccination rates no longer will be higher in the U.K. than other advanced economies.
The chances of U.S. and U.K. rates rising in lockstep are remote; the U.S. recovery is far more advanced.
U.K. political risks are low now, but next year investors will start to weigh the risks from the 2024 election.

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.

5 Aug 2021 Will the MPC Finally Set Out its Views on the Lower Bound and Sequencing?

Now that negative rates are in the toolkit, the MPC might divulge its new estimate for the lower bound.
The MPC also might lower the threshold that Bank Rate must reach before it starts to wind down QE.
We expect Ofgem to announce on Friday that the default tariff cap will rise by a painful 13.5% in Q4.

samuel tombs (UK Economist)U.K.

4 Aug 2021 Furlough Usage isn't Falling Fast Enough to Signal a Painless End in Q4

The proportion of staff furloughed fell to 5.7% at the end of June, from 7.5% a month earlier...
...But surveys point to only a marginal fall in early July, and still high usage in fully recovered sectors.
Firms likely won't fully relinquish recent productivity gains; the employment rate will drop back in Q4.

samuel tombs (UK Economist)U.K.

3 Aug 2021 When will the Manufacturing Sector's Recovery Get Back on Track?

The recovery in the manufacturing sector slowed in July, probably to a complete standstill.
Output should pick up in the autumn, amid easing supply constraints and robust restocking demand...
...But we see little chance of long-term reshoring; Brexit is another barrier to a sustained recovery.

samuel tombs (UK Economist)U.K.

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