Friday November 6, 10:01 AM
INSTANT VIEW 2-UK input prices stronger than expected in Oct
LONDON, Nov 6 (Reuters) - Annual input price inflation for
British manufacturers unexpectedly turned positive in October
for the first time since February, driven by a rebound in crude
oil prices, official data showed on Friday.
Producer
output price inflation rose at its fastest pace
since March, broadly as expected.
The figures suggest pressures are building up at the start
of the inflation pipeline.
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KEY FIGURES FOR OCT PRODUCER PRICES DATA
MM YY
Output prices nsa 0.2 1.7
Core (Berlin: LJ1.BE - news) output prices sa 0.3 2.0
Input prices nsa 2.6 0.1
CONSENSUS FORECASTS (IN PCT) MM YY
Output prices nsa 0.3 1.8
Core output prices sa 0.2 2.0
Input prices nsa 1.5 -1.3
FOR PREVIOUS PPI STORIES, CLICK ON
KEY POINTS
- Highest annual rate of producer output price inflation
since March
- Highest annual rate of core producer output price
inflation since April
- First annual rise in input prices since February
- Highest annual rate of core input price inflation since
April
- Biggest annual fall in fuel input prices since June 1996
ANALYSTS' COMMENTS
PHILIP SHAW, CHIEF ECONOMIST, INVESTEC
'The eye-catching figure is the big jump in input prices on
the month, which is so far greater than expectations that the
year-on-year change is now in positive territory, albeit just.
'Against that, the output price numbers weren't quite as
strong as expected, but even so the report as a whole is a
reminder that there is an issue with imported costs coming into
the UK, particularly commodity-based price pressures.'
AMIT KARA, UK ECONOMIST, UBS (Virt-X: UBSN.VX - news) :
'Input prices are clearly above expectations, but primarily
driven by higher oil prices. Output prices are still fairly
subdued.'
'From a policy perspective, if anything the MPC (A050540.KQ - news) would prefer
to have inflation, so they're not likely to do anything to
smother this uptick in pipeline inflation. Historially, though
the link between producer price inflation and CPI (NYSE: CPY - news) inflation has
been quite weak. It's not something they're going to worry about
yet.'
Keywords: BRITAIN PPI/
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