UK producer prices rose by a tad more than forecast in August
Fri 07 Sep 2012
LONDON (SHARECAST) - Factory gate inflation increased at a 0.5 per cent month-on-month pace during the month of August (2.2% year-on-year), marking a moderate acceleration from last month´s rise of 1.8% year-on-year, according to the latest data from the Office for National Statistics (ONS).
The consensus estimate was for a rise of 0.2% month-on-month (1.9% year-on-year).
Excluding food, beverages, tobacco & petroleum prices rose by 0.1% month-on-month, while for the year to August 2012 the output price index rose by 1.2%, unchanged from last month.
The last time the annual rate was lower was in December 2005, when the index rose 1.1%.
Economists had been expecting a rise of 0.1% month-on-month (1.2% year-on-year) in core prices.
Between July and August the total input price index rose 2.0% (1.4% year-on-year), compared with a rise of 0.4% between June and July (-2.4% year-on-year).
The consensus for input prices was for an increase of 1.7% month-on-month (1.2% year-on-year).
In any case, it must be pointed out that in terms of quarterly rates of change both output and input prices actually fell, by 0.4% and 3.4% each.
Commenting on the data economists at Barclays Research are of the following opinion: "The rise in input prices in August was the second consecutive monthly increase following the sharp falls seen in April, May and June. This dynamic has been driven by global oil prices, which have a fairly rapid pass-through to derivative products such as petrol, chemicals, rubber and plastics. Other input costs were unchanged or a little weaker on the month. Notably, food input prices fell for a second month in succession, which may dampen fears that consumers face a sharp rise in food bills in the autumn.
(...) Indeed, today’s BoE/GfK inflation expectations survey suggested households have become less concerned about the inflation outlook."