|Source: UK Office for National Statistics|
In December, UK factory gate/wholesale price annual inflation for all manufactured products rose to 5.0 per cent - the highest since 1991. Input price annual inflation rose from 10.9 per cent in November to 11.3 per cent in December.
The Bank of England decided last Thursday not to lower the benchmark interest rate after a cut in December to 5.5% as members of the rate-setting Monetary Policy Committee worried about the threat of inflation from higher energy prices, even though fears of recession have grown in recent weeks.
Month on month, the output prices measure for all manufactured products rose 0.5 per cent in December, mainly reflecting rises in petrol and food products.
The 'narrow' output prices measure, which leaves out volatile sectors, showed an annual increase of 2.5 per cent. The seasonally adjusted measure rose 0.4 per cent between November and December.
Month on month, the input prices measure of UK manufacturers’ materials and fuels rose 1.0 per cent. This mainly reflected rises in the prices of home produced food and imported parts. In seasonally adjusted terms the index rose 0.5 per cent between November and December.
The 'narrow' input prices measure rose 3.7 per cent in the year to December. In seasonally adjusted terms the index rose 0.6 per cent between November and December.
Producer Price Indices monitor the price changes of goods bought and sold by UK manufacturers. Input prices are prices of materials and fuels bought and output prices, also known as 'factory gate prices', are prices at which goods are sold.
As well as output and input price indices, results are shown for 'narrow' indices, which are a subset which exclude more seasonal and erratic items (food, drink, tobacco and petroleum).
PPIY is output prices excluding excise duties.