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.

manufacturers

15 Sept 2022 UK Monitor Will the Better News on CPI Inflation Keep Coming?

  • The month-to-month change in the August core CPI exceeded its seasonal norm by the least this year.
  • The recent decline in commodity prices suggests core CPI inflation will fall sharply next year.
  • Services inflation will be stickier, but the current support from energy price rises and VAT changes will fade.

Samuel Tombs (UK Economist)U.K.

1 Sept 2022 UK Monitor Capex will Continue to Recover, Despite the Risk of Recession

  • Business investment rose again in Q2, as key uncertainties faded and supply constraints began to ease.
  • We expect a further rebound in H2; balance sheets are strong and investment intentions still are high.
  • But we doubt capex will return to its pre-Brexit share of GDP; the U.K is a less desirable place to invest.

Gabriella DickensU.K.

26 Aug 2022 UK Monitor It's Not all Bad News on the Inflation Front

We expect Ofgem to announce today that the default tariff cap will increase by 80% in October.

This will boost CPI inflation by 4pp, assuming the ONS treats the government's grant as a fiscal transfer.

Core goods inflation, however, is set to fall sharply this winter; manufacturers and retailers have excess stock.

Samuel Tombs (UK Economist)U.K.

24 Aug 2022 UK Monitor Flash PMIs Suggest the Economy is Stagnant at Best

August’s PMIs suggest the recovery has petered out, with the manufacturing sector heading into recession.

Employment growth also has come off the boil, while price pressures mostly have continued to ease.

All this suggests the MPC have room to act with caution; a 50bp hike is not the done deal assumed by markets.

Samuel Tombs (UK Economist)U.K.

16 Aug 2022 UK Monitor A Growing Trade Deficit will Increase Reliance on the Kindness of Strangers

The trade deficit has hit a record share of GDP over the last two quarters, but it will only get worse.

Goods imports will fall, as firms now have excess stock, but the value of energy imports will surge this winter.

The U.K.'s shortfall in exports relative to 2018 remains the largest in the G7; Brexit is largely to blame.

Samuel Tombs (UK Economist)U.K.

1 Aug 2022 UK Monitor Will a Household Saving Drawdown Keep a Winter Recession at Bay?

Households saved much less and borrowed more in Q2; real spending, therefore, likely was unchanged from Q1.

On paper, households have ample scope to reduce their saving rate further, but we see several constraints.

Some already have depleted savings, credit conditions are tightening, and deleveraging will be more attractive.

Samuel Tombs (UK Economist)U.K.

14 July 2022 We Still Expect a Contraction in GDP in Q2, Despite the Sharp Rise in May

May’s rise in GDP was driven by a surge in doctor appointments-

really-and a jump in manufacturing output.

Consumer services firms struggled and will remain under pressure as households’ real incomes fell further.

June’s extra bank holiday also will dampen Q2 GDP, we expect a quarter-on-quarter contraction of 0.3%.

Gabriella DickensU.K.

12 July 2022 Business Investment Still Looks Set to Rise, Reducing Recession Risks

Business investment fell in Q1, partly due to supply disruption preventing orders being fulfilled.

But supply shortages are easing, and with Brexit and Covid uncertainty dissipating, capex should rebound.

A renewed rebound in business investment will support GDP growth in the second half of the year.

Gabriella DickensU.K.

8 July 2022 The Plunge in Commodity Prices has Improved the 2023 Inflation Outlook

June's Decision Maker Panel Survey shows firms' expectations for price and wage rises have increased.

But households' inflation expectations have fallen back, and more importantly, commodity prices have plunged.

Core goods CPI inflation will turn negative next year, helping to return the headline rate to 2% by late 2023.

Samuel Tombs (UK Economist)U.K.

6 July 2022 Britain is Unlikely to Run Out of Natural Gas This Winter

Domestic production accounts for nearly half of natural gas consumption, well above the European average.

Imports from Russia accounted for only 5% of the total; the U.K. has long-term deals with Norway and Qatar.

The bigger risk is that manufacturers are indirectly af- fected by rolling blackouts in other European countries.

Samuel Tombs (UK Economist)U.K.

5 July 2022 Forecast Review: The Inflation Roller Coaster has Become Even Steeper

The MPC and consensus still aren't downbeat enough on Q2 GDP; we look for a 0.7% quarter-on-quarter drop.

CPI inflation now looks set to approach 11% in October, driven by further huge rises in food and energy prices...

...But wage growth and inflation expectations haven’t risen, while producer price inflation now is set to plunge.

Samuel Tombs (UK Economist)U.K.

1 July 2022 Most of Q1's Increase in GDP Likely was Reversed in Q2

The first quarter’s rise in GDP has brittle foundations; households have had to retrench in Q2.

The support to GDP growth from restocking will fade; firms now have enough inventory to meet demand.

A recession, however, isn’t likely; households’ real dis- posable incomes will rise in Q3, and capex will recover.

Samuel Tombs (UK Economist)U.K.

24 June 2022 June's Stable PMI Provides Little Reassurance on Q2 GDP

The composite PMI held steady at 53.1 in June, but it has been misleadingly upbeat in recent months.

It excludes the retail and public sectors, both of which will drag on quarter-on-quarter GDP growth in Q2.

We still forecast a 0.7% q/q drop in Q2 GDP, and only a 25bp increase in Bank Rate in August.

Gabriella DickensU.K.

10 June 2022 April GDP Data Will Confirm the Recovery has Stalled

We look for a mere 0.1% month-to-month rise in GDP in April, only just reversing the prior month's fall.

While output in the manufacturing and distribution sectors probably rebounded.

The consumer services sector was hit by the real income squeeze, and Covid-related spending plunged.

Samuel Tombs (UK Economist)U.K.

25 May 2022 The Sharp Decline in the PMI Makes a Pause from the MPC Even More Likely

The PMI points to GDP flatlining in Q2, but a fall is more likely, given the plunge in government Covid spending.

The MPC shouldn't take comfort from the resilience of the employment index; it lags changes in the PMI.

Many firms still are hiking prices, but the number absorbing cost rises, due to faltering demand, is growing.

Samuel Tombs (UK Economist)U.K.

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