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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- 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.
- January's 5.5% rate of CPI inflation only just exceeded the MPC's 5.4% forecast; the surprise was all in goods.
- Services inflation is only slightly above its long-run average; the MPC needn't panic.
- The headline rate likely will peak at 7.7% in April, but then fall swiftly, potentially undershooting the target in 2023.
Samuel Tombs (UK Economist)U.K.
- The average rate for a two-year fixed rate mortgage, with a 75% LTV ratio, likely will leap to 2.1%, from 1.6%.
- This increase won't be a problem for most refinancers, but it will impact affordability for new homebuyers.
- Next week's labour market data will show Q4's small drop in employment is on course to be reversed in Q1.
Samuel Tombs and Gabriella DickensU.K.
- Real household disposable income looks set to drop by nearly 2% this year, the most since 1977...
- ...But consumers can draw on the savings they amassed during the pandemic and borrow more.
- We expect the saving ratio to fall to 4.5% in 2022—1.5pp below its pre-Covid level—so that spending rises further.
Samuel Tombs (UK Economist)U.K.
- Investors think the MPC will hike Bank Rate by a further 100bp this year, leaving it at 1.5% by year-end.
- But the MPC still expects only "modest" further hikes; Bailey was clear: "do not get carried away".
- The MPC's forecasts for CPI inflation imply rates need to rise only 35bp more to return it to the 2% target.
Samuel Tombs and Gabriella DickensU.K.
- Growth in the broad money supply reverted to its pre-Covid rate in Q4, despite very low interest rates.
- Households dipped into their excess savings in December to maintain their spending, not increase it.
- Mortgage refinancing will cease to boost disposable incomes in 2022; the effective rate will stabilise.
Samuel Tombs (UK Economist)U.K.
- The MPC's likely decision next week to raise Bank Rate to 0.50% should mark the end of QE reinvestments.
- The APF will shrink by £25B in March; fallout, however, will be limited, as markets have known for some time.
- Our working assumption remains the BoE will sell £10B of gilts per quarter when Bank Rate reaches 1%.
Samuel Tombs (UK Economist)U.K.
- We are bringing forward our forecast for the next two increases in Bank Rate, following December's CPI data.
- While food, energy and goods prices are mainly to blame for high inflation, services inflation has risen too.
- CPI inflation, however, will fall sharply in H2 and should be below target in 2023, curtailing the hiking cycle.
Samuel Tombs (UK Economist)U.K.
- 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.
- 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.
