British producer prices surge to record high in July
Wednesday, 13 August 2008
LONDON, Aug 12 (AFP): The cost of goods leaving British factories surged in July by the highest annual rate since 1986, due to higher prices for chemicals, metal and petrol products, official data showed yesterday.
Producer prices soared by a record 10.2 per cent in July compared with 12 months earlier, Britain's Office for National Statistics (ONS) said in a statement.
That was the highest since records began in 1986 and compared with a 10.0- per cent jump the previous month.
On a monthly basis, the ONS added that producer prices climbed by 0.4 per cent in July from June amid record high oil prices.
However, both readings were lower than market expectations, which had been for an annual increase of 10.3 per cent and a monthly gain of 0.5 per cent.
World oil prices had struck record heights above 147 dollars per barrel on July 11, but have since fallen heavily on fears about slowing global economic growth.
"The producer price data provide some very modest relief on the inflation front, with the rise in output prices being modestly below expectations and input prices falling," said Global Insight economist Howard Archer.
Input costs, or the cost of raw materials, for producers eased 0.6 per cent in July compared with the previous month.
But they surged 30.1 per cent in July, compared with 12 months earlier. That was not far off the record 30.8 per cent increase that was seen in June.
The expected decision came as the BoE's rate-setting monetary policy committee (MPC) faces a dilemma between cutting short-term rates to boost growth, or lifting them to keep rising inflation in check.
"While pipeline price pressures in the UK economy remain very strong, there is some tentative evidence that they may be close to a peak," noted Capital Economics analyst Paul Dales.
"For the first time in 10 months, producers' raw material costs fell in July" from the previous month.
Producer prices soared by a record 10.2 per cent in July compared with 12 months earlier, Britain's Office for National Statistics (ONS) said in a statement.
That was the highest since records began in 1986 and compared with a 10.0- per cent jump the previous month.
On a monthly basis, the ONS added that producer prices climbed by 0.4 per cent in July from June amid record high oil prices.
However, both readings were lower than market expectations, which had been for an annual increase of 10.3 per cent and a monthly gain of 0.5 per cent.
World oil prices had struck record heights above 147 dollars per barrel on July 11, but have since fallen heavily on fears about slowing global economic growth.
"The producer price data provide some very modest relief on the inflation front, with the rise in output prices being modestly below expectations and input prices falling," said Global Insight economist Howard Archer.
Input costs, or the cost of raw materials, for producers eased 0.6 per cent in July compared with the previous month.
But they surged 30.1 per cent in July, compared with 12 months earlier. That was not far off the record 30.8 per cent increase that was seen in June.
The expected decision came as the BoE's rate-setting monetary policy committee (MPC) faces a dilemma between cutting short-term rates to boost growth, or lifting them to keep rising inflation in check.
"While pipeline price pressures in the UK economy remain very strong, there is some tentative evidence that they may be close to a peak," noted Capital Economics analyst Paul Dales.
"For the first time in 10 months, producers' raw material costs fell in July" from the previous month.