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
Please use the filters on the right to search for a specific date or topic.
Weekly Monitor Daily Monitor
- We think the headline rate of CPI inflation rose merely to 4.1% in January, from 4.0% in December...
- ...But services inflation likely leapt by 0.5pp to 6.9%; January 2023’s fall in the catering CPI likely wasn’t repeated.
- Our services inflation forecast exceeds the MPC’s, but it would still point to slowing near-term momentum.
Samuel TombsUK
- Most labour demand indicators have weakened a bit further, so employee numbers were likely flat in January.
- LFS data remain of poor quality; the unemployment rate is probably slightly higher than the current data suggest.
- We expect a 0.4% month-to-month rise in ex-bonus AWE in December, still inconsistent with the inflation target.
Samuel TombsUK
- We think GDP dropped by 0.3% month-to-month in December, contributing to a 0.1% quarter-to-quarter fall.
- Stormy weather likely disrupted construction output; strikes weighed on output in the health sector.
- News of a mild recession, however, won’t take the MPC’s attention away from the risk of ingrained high inflation.
Samuel TombsUK
- CPI inflation likely rose to 4.1% in January, from 4.0% in December, mainly due to base effects.
- BRC data point to a plunge in core goods CPI inflation, though the relatively early Index Day will limit the decline.
- The MPC expects the headline rate to rise slightly, but the scale of the jump in services inflation will surprise it.
Samuel TombsUK
- The ONS now estimates the headline unemployment rate fell to 3.9% in November, from 4.2% in August...
- ...But it still hasn’t addressed the collapse in the LFS response rate; other data point to rising unemployment.
- Hidden slack also increased in H2; the number of inactive people wanting work rose, while average hours fell.
Samuel TombsUK
- The outlook for real household disposable income has continued to improve...
- ...Energy prices have fallen and wage growth is moderating slowly; expect further tax cuts in the Budget.
- We still expect the MPC to cut rates by 75bp in 2024— markets nearly agree—but the risk of fewer cuts has risen.
Samuel TombsUK
- Lingering votes to hike Bank Rate distract from most members’ endorsement of rate cuts this year...
- ...Two-year-ahead inflation is forecast nearer 2% under market rates than constant rates; upside skew has gone.
- We still expect the first 25bp cut to come in May, but the risks remain tilted towards a later commencement.
Samuel TombsUK
- New population estimates will likely raise the Chancellor’s room for tax cuts by £5B-to-£10B.
- The ONS has raised its forecast for growth in the working age population to 1.0% y/y over 2023-2029, from 0.6%.
- We think the OBR will respond by lifting its forecast for year-over-year growth in potential GDP by about 0.1pp.
Samuel TombsUK
- The pick-up in liquid assets despite meagre net borrowing implies households chose to save more in late 2023.
- Savings in real terms might still be below trend, but they are better distributed among households than a year ago.
- Lower mortgage rates have triggered only a small rise in approvals to date, but they will continue to recover in Q1.
Samuel TombsUK
- Energy’s weight in the CPI will likely decline in 2024, limiting the impact of falling prices on the headline rate.
- On net, weight changes will have a downward influence on the headline rate of inflation in January of about 8bp...
- ...But will then raise the path from April, albeit by no more than 20bp in any one month in 2024.
Samuel TombsUK
- People’s optimism in their personal financial outlook recovered in January to its long-run average.
- Confidence isn’t always a reliable spending bellwether, though there’s little reason to expect it to mislead now.
- Governments, however, don’t always get the credit for improving economies, as the Tories discovered in 1997.
Samuel TombsUK
- The MPC will slash its forecast for CPI inflation in 2024 after encouraging recent data and natural gas price falls.
- This revision will persuade the hawks to join the majority, but concerns about the medium-term outlook will linger.
- The MPC will try to counter market pricing for swift rate cuts by forecasting above-2% inflation two-years ahead.
Samuel TombsUK
- January’s composite PMI data point to GDP rising at a near-trend 0.2% quarter-on-quarter pace in Q1.
- S&P’s survey also points to 0.2% q/q growth in employ- ment, which would stop unemployment rising further.
- Producer output prices remain flat despite shipping disruptions, but services inflation is fading only slowly.
UK
- Public borrowing is on course to undershoot the OBR’s forecast for 2023/24 by about £5B.
- ‘Fiscal headroom’ is a distraction; Mr. Hunt will cut taxes as much as he can without jeopardising MPC rate cuts.
- We expect Budget tax cuts of £20B in 2024/25, but some people might save the windfall, fearing tax hikes soon.
Samuel TombsUK
- Vacancies are falling and redundancies are grinding higher; still no big shifts, but February is a key month.
- The OBR’s medium-term RPI inflation forecast is too low; a reappraisal would limit the rise in fiscal headroom.
- Markets’ willingness to absorb extra issuance is the main constraint on tax cuts; Mr. Hunt won’t push it too far.
Samuel TombsUK
- Retail sales fell by 0.9% q/q in Q4, but spending on services fared better; total spending likely fell only slightly.
- We judge households have finished re-accumulating the savings buffer they lost in 2022...
- ...So brisk growth in real disposable income this year should filter through to spending; the MPC won't panic.
Samuel TombsUK
- The official house price index will fall further in Q1, in response to last year's rise in mortgage rates...
- ...But mortgage payment affordability will improve rap- idly this year, as rates come down and incomes rise.
- The timeliest indicators of house purchase demand have rebounded; prices will return to their peak by year-end.
UK
- Three-month-on-three-month annualised growth in the all-items CPI slowed to just 1.4% in December...
- ...and to 2.2% for the core CPI; both headline and service inflation have undershot the MPC's forecast.
- The combination of falling energy prices and flat goods prices points to a 2% headline rate by April.
Samuel TombsUK
- The autumn slowdown in wage growth looks real; revisions after the second estimate tend to be small...
- ...But surveys point to a near-term re-acceleration, and the NLW hike looks set to have some bite.
- The unemployment rate is rising slowly; the MPC can’t be confident it is already above or near its equilibrium.
Samuel TombsUK
- Investors now attach a small probability to the MPC cutting Bank Rate by 50bp at one of its meetings.
- Almost one-third of Bank Rate cuts have been larger than 25bp, but the odds are low this year.
- Markets aren’t stressed, recession risks are easing and the MPC would prefer sub-2% to above-target inflation.
Samuel TombsUK
