Pantheon Macroeconomics in the headlines over UK/US macro twists; founded by Ian Shepherdson, famed WSJ 2014 US forecaster of the year. Short, sharp econ read.
The UK has reported a lower-than-expected public sector deficit of £132 billion for the year to March, driven by higher tax receipts. However, ongoing conflicts in the Middle East are expected to increase borrowing costs and reduce fiscal space, threatening future economic stability.
Oil markets have shifted as the U.S. and Iran outline a framework to reopen the Strait of Hormuz. Brent and WTI hover around the mid- to high-80s/low-90s as sanctions waivers enable resumed Iranian exports. Global stocks move with muted optimism while gas prices remain elevated compared to prewar levels.
New data show the UK economy has cooled after a stronger start to 2026, with April GDP expected to slip as higher fuel costs damp demand. Retail sales have fallen, and experts warn the energy shock from the Iran conflict is weighing on households and firms. Analysts expect a continued slowdown into Q2.
Inflation has held steady at 2.8% in May, the same as April, with transport costs (air fares, petrol) and taxes offset by slower food price rises. Petrol and fuel costs rise; airfares surge due to Easter timing, while food and heating costs ease. The Bank of England faces decisions as rate prospects remain uncertain.
The leadership race has intensified as Andy Burnham is seen as the frontrunner to become prime minister, with markets seeking stability. Economists warn that the next chancellor will shape bond markets and fiscal policy, while Burnham pledges to follow fiscal rules and reduce bills. The City remains anxious about potential changes in taxation and public spending.