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

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natural gas

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.

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.

15 Nov 2021 October's CPI Inflation Print Likely Will Exceeded the Consensus

  • Energy prices likely were the key driver of higher CPI inflation in October, but the core rate probably rose too.
  • Used car prices rocketed again, while data from the BRC point to a chunky rise in clothing prices.
  • Hospitality firms probably raised prices in response to the VAT hike; the boost is uncertain but likely large.

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.

6 Oct 2021 Net Trade will Return to Depressing GDP Growth Next Year

  • Revisions to Q2 GDP data brightened the picture of the economy's recent trade performance...
  • ...But Brexit still is preventing U.K. exporters from benefiting fully from the upswing in global trade.
  • The return of the structural deficit in services trade will cause net trade to weigh on GDP growth in 2022.

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.

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.

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.

9 Sept 2021 What Does the Latest Surge in Energy Prices Mean for CPI Inflation?

  • The MPC's energy price assumptions for its inflation forecast are too high in the near-term, and for 2023.
  • Wholesale electricity and natural gas price changes don't immediately impact the CPI...
  • ...Future prices still imply that Ofgem will lower slightly the default tariff cap next year, not raise it further.

Samuel Tombs (UK Economist)U.K.

19 Aug 2021 CPI Base Effects Distract from July's Slowing in Core Price Rises

  • The pace of month-to-month increases in consumer prices slowed in July; the re-opening surge is over.
  • CPI inflation still is set to rise sharply, but the peak will be a bit below the 4% rate expected by the MPC...
  • ...The MPC's food and energy price assumptions are too high, while goods inflation will fall swiftly next year.

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.

19 July 2021 Inflation Data to Force Early End to QE, but a 2022 Rate Hike isn't Likely

We now expect the MPC to end its gilt purchases immediately at next month's meeting, following last week's consumer prices data.

Samuel Tombs (UK Economist)U.K.

20 May 2021 Surging Energy Prices won't Distract the MPC from Modest Core Inflation

April’s consumer prices report was notable for the absence of a pick-up in domestically-generated inflation.

Samuel Tombs (UK Economist)U.K.

17 May 2021 April CPI Inflation to Exceed the Consensus

April's consumer prices figures will be closely watched by markets on Wednesday for signs that prices are surging as businesses reopen, especially in light of the big jump in U.S. CPI inflation reported last week.

Samuel Tombs (UK Economist)U.K.

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