UK Publications
Below is a list of our UK 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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- Public borrowing in October exceeded the OBR’s March Budget forecast for the first time this year.
- Revisions by the OBR to its economic assumptions likely will not lower the borrowing forecast materially.
- Mr. Hunt’s fiscal rules don’t rule out tax cuts, but he likely will delay most until after the election to buy some votes.
Samuel TombsUK
MORTGAGE RATES TO FALL FASTER THAN WE EXPECTED IN Q1...
- ...WE NOW FORESEE A 5%, NOT 6%, PEAK-TO-TROUGH FALL IN PRICES
Samuel TombsUK
- On Thursday, Ofgem will likely announce that consumer electricity and natural gas prices will rise modestly in Q1.
- Businesses have essentially finished passing on higher energy costs to customers...
- ...Many have locked in high wholesale prices but can still slow the rate of price rises over the coming months.
Samuel TombsUK
- In one line: We expect a recovery in the coming months, driven by a rebound in real incomes.
UK
- Retail sales fell for the second straight month in October, though that partly reflected the warmer, wetter weather.
- But real incomes look set to recover, as pay growth outstrips CPI inflation and cost-of-living grants resume.
- Some of this extra cash will be saved, but people will be able to spend more too; retail sales will recover in Q4.
Samuel TombsUK
- The official house price index in September was only 0.7% below its November 2022 peak...
- ...but the first estimate usually is revised down by 1%, and Q3’s rise in mortgage rates hasn’t impacted the data yet.
- The better outlook for mortgage rates, however, hints prices in Q1 will stabilise at 5%, not 6%, below their peak.
UK
- October’s 4.6% rate of CPI inflation undershot the MPC’s forecast by 0.2pp, largely due to services prices.
- The core CPI has risen at a seasonally adjusted annualised rate of just 2.2% over the past three months...
- ...Some one-off price falls have supported the slowdown, but PPI data suggest it will largelybe sustained.
Samuel TombsUK
- In one line: Well below the MPC’s forecast, thanks to slowing services CPI inflation.
Samuel TombsUK
- In one line: Much slower wage growth is increasing the chances of a rate cut in H1 2024.
Samuel TombsUK
- Average weekly wages rose at a month-to-month annualised rate of just 2.9% in September.
- This first estimate will likely be revised up, but the slowing trend is now entrenched; labour market slack is growing.
- Growth in PAYE median pay has also slowed; the case for cutting Bank Rate gradually will be robust by May.
Samuel TombsUK
- Real interest rates will rise further in 2024 if nominal rates hold steady, encouraging extra private-sector saving.
- The effective interest rate on the stock of mortgages will continue to rise, even if Bank Rate is cut sharply.
- The fiscal consolidation will intensify next year; macro policy will remain restrictive even with rate cuts.
Samuel TombsUK
- In one line: The fall in households’ spending will be reversed in Q4.
Samuel TombsUK
- GDP would have fallen in Q3, if the volatile net trade and inventories components hadn’t support growth...
- ...But growth in real household disposable income will pick up in Q4, enabling both more spending and saving.
- Business investment was in line with pre-Covid norms despite falling in Q3; surveys signal continued resilience.
Samuel TombsUK
- In one line: Casts doubt on the increases in the Nationwide and Halifax measures of house prices.
UK
- We think services inflation fell to 6.7% in October, from 6.9% in September, 0.2pp below the MPC’s forecast.
- Granted, Index Day was closer than usual to the school holidays, and rents CPI inflation likely continued to rise...
- ...But surveys show that substantially fewer firms raised prices than a year ago, when energy costs soared.
Samuel TombsUK
- In one line: Consistent with unemployment rising more quickly than the MPC expects.
Samuel TombsUK
- On balance, survey indicators suggest payroll employee numbers merely held steady in October...
- ...This implies the claimant count rose, given further workforce growth, but it is an imperfect unemployment gauge.
- Month-to-month growth in average weekly wages likely slowed in September, despite public-sector pay deals.
Andrés Abadía (Chief LatAm Economist)UK