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.

liquidity Banks

11 Jan 2022 The MPC won't Match the U.S. Fed's Rate Hiking Pace This Year

  • Investors expect U.K. official rates to rise by 98bp this year, exceeding the 86bp anticipated rise in the U.S.
  • U.K. households, however, are less well-placed than those in the U.S. to withstand higher rates.
  • The MPC will switch to QT before the Fed, while membership  changes will strengthen the doves' hands.

Samuel Tombs (UK Economist)U.K.

5 Jan 2022 Lower Saving Reflects Inflation Pressure, not Reviving Confidence

  • The return of monthly saving to pre-Covid levels is a sign of the real income squeeze, not surging spending.
  • The recent surge in house prices, however, is enabling refinancing homeowners to access lower interest rates.
  • Firms continued to repay external borrowing in November, but we remain upbeat on the capex outlook.

Samuel Tombs and Gabriella DickensU.K.

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.

30 Nov 2021 Does October's Low Saving Signal Households' Mindset has Changed?

  • Households last month saved the least and borrowed the most for consumption since the pandemic began...
  • ...People are maintaining their spending while real incomes are falling; they aren't bingeing.
  • Firms continued to repay external finance in October, but this isn't necessarily a bad sign for investment.

Samuel Tombs (UK Economist)U.K.

4 Nov 2021 Look to the Housing Market, not Interest Payments, for Rate Hike Pain

  • The effective mortgage rate will be just 20bp or so higher at the end of 2022, if markets' Bank Rate view is right.
  • The interest rate on bank deposits would rise by more, so households' net interest payments would fall, initially.
  • The housing market, however, looks like the weak link; we expect house prices to flatline in H1 2022.

Samuel Tombs (UK Economist)U.K.

2 Nov 2021 Households won't Abandon their Cautious Mindset Anytime Soon

  • Households continued in September to save more and borrow less than they did before Covid.
  • The recovery in spending will continue only if households save less in response to falling real incomes...
  • Households did this in 2016, but are less confident now, despite having a larger precautionary buffer.

Samuel Tombs (UK Economist)U.K.

26 Oct 2021 How Quickly will the MPC Shrink the APF Over the Coming Years?

  • The MPC will stop reinvestments in Q1 and start selling gilts in Q4 2022, if markets are right about rates.
  • The impact of asset sales is unknown and the MPC wants them to be on auto pilot, so they will be cautious.
  • Gilt sales of £10B per quarter would balance creating future stimulus space with keeping markets steady.

Samuel Tombs (UK Economist)U.K.

7 Oct 2021 Could the Economy Withstand the Rate Hikes Markets Expect?

  • Markets expect interest rates to rise more in the next 15 months than in any other period since 2007.
  • Firms are well placed to cope, and the effective interest rate on all mortgage debt would rise only slowly...
  • ...But higher new mortgage rates would hit spending via lower house prices or higher mortgage payments.

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.

25 June 2021 The First Rate Hike Still Looks Distant, after June's MPC Minutes

Investors hoping for a more hawkish tone from the MPC were left disappointed yesterday.

Samuel Tombs (UK Economist)U.K.

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Keywords for: U.K. Documents

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