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.

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1 Apr 2022 Don't Mistake the Swift Recovery in GDP for Private Sector Strength

  • 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.

17 Feb 2022 Inflation Data Bolster the Case for Rate Hikes, but not 50bp in One Go

  • 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.

11 Feb 2022 Mortgage Rates will Rise Further, Slowing the Housing Market

  • 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.

9 Feb 2022 Will Households Spend More this Year, Despite Falling Real Incomes?

  • 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.

4 Feb 2022 MPC to Markets: Don't Get Carried Away

  • 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.

2 Feb 2022 Money Supply Data Suggest the Economy Won't Overheat This Year

  • 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.

27 Jan 2022 To Reinvest or not to Reinvest: the £25B Question

  • 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.

20 Jan 2022 The MPC will React Immediately to December's Blowout CPI Figure

  • 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.

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.

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