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Reuters: Producer Prices Rocket 2.2% Due To Oil

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http://uk.biz.yahoo.com/11092009/325/produ...ces-august.html

Friday September 11, 09:35 AM

Reuters

Scandals and silliness

Producer input prices up in August

LONDON (Reuters) - Producer input prices rose at their fastest monthly rate in more than a year in August , driven by oil costs and pushing factory gate inflation slightly higher on the month.

The Office for National Statistics said on Friday producer input prices rose by 2.2 percent in August, more than twice as fast as expected, after falling 1.1 percent the previous month.

On the year, input prices were down 7.5 percent.

Factory gate prices were 0.2 percent higher on the month in August versus analysts' expectations of a 0.1 percent increase, an unchanged rate of increase from the previous month.

Year on year, producer output prices were 0.4 percent lower.

The figures suggest that next week's consumer price inflation data risks surprising on the upside. Inflation in Britain has been stickier than in many of its trading partners during the economic downturn.

The ONS said monthly rise in input prices mainly reflected a rise in the price of crude oil

The monthly rise in output prices was largely down to price rises in other manufactured products, petroleum and chemical products, partly offset by lower tobacco and alcohol product prices.

_____________________________

What a difference a day makes in this world of ours.

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http://business.timesonline.co.uk/tol/busi...icle6830542.ece

Manufacturers’ costs are rising sharply on the back of soaring oil prices, said Government statisticians this morning.

The Office for National Statistics (ONS) said Producer Price Inflation (PPI), or the cost of manufactured products, rose by 0.2 per cent between July and August, but fell 0.4 per cent in the year to August.

The cost paid by manufacturers for raw materials rose by 2.2 per cent between July and August thanks largely to soaring oil prices, but businesses opted to keep a lid on output inflation by absorbing most of the costs themselves.

Economists said that the data suggests inflation is beginning to slowly creep back up, but that manufacturers will continue to find it difficult to pass on price rises.

Jonathan Loynes, of Capital Economics, said: “After the downward trend of the last year or so, it looks like the annual rates of input and output price inflation are on their way back up again.â€

“But there is no reason to panic. There are vast amounts of spare capacity in the economy and this is another factor which we expect to bear down on core inflation over the next year or two.â€

Richard McGuire, of RBC Capital Markets, said: “UK producers opted to absorb the unexpectedly sharp rise in costs in July resulting in lower margins rather than higher pipeline price pressures pointing to lower growth rather than quickening CPI inflation.

How long can this status quo be maintained?

So the experts think this will be contained for a couple of years!!

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http://business.timesonline.co.uk/tol/busi...icle6830542.ece

How long can this status quo be maintained?

So the experts think this will be contained for a couple of years!!

spare capacity costs money, what with people on wages standing around, factories paying council tax and loans being paid...a recession is supposed to clear the waste....no clear...no end in sight.

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Oh come on now ffs you lot holding onto the notion this is all going to be deflationary are beginning to sound like fecking hpc deniers.

All commodities are going up, everything is going up apart from it seems Plasma TV's :lol:

The clever money is moving into assets and out of paper, see it for what it is rather than what you want it to be and prepare accordingly.

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spare capacity costs money, what with people on wages standing around, factories paying council tax and loans being paid...a recession is supposed to clear the waste....no clear...no end in sight.

Until they are 'allowed' to close down?

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Until they are 'allowed' to close down?

thats right. take the Luton lot at GM or whatever they are called.

sensible workers would be making their moves, rather than fighting the closure....but you see this time and again, factories obviously obsolete and the worker stay and complain when its closing...as if they have a right to the place staying open.

then again, we see the asset strippers of MG ( I think) getting away with millions while the plant lost hundreds of millions and doing no wrong!

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Hi RB

You see why Gordo cut VAT, he wants little or no (measured) inflation before he leaves office. If we get it the BOE must lift rates & then Holy Hell things will start.

Mike

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surprising on the upside

Yeah I was so surprised that £190B extra money in the system should cause inflation I fell off my chair.

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thats right. take the Luton lot at GM or whatever they are called.

sensible workers would be making their moves, rather than fighting the closure....but you see this time and again, factories obviously obsolete and the worker stay and complain when its closing...as if they have a right to the place staying open.

The Luton plant is the most efficient plant in the WHOLE of General Motors.

The problem is GM have too much production capacity in Europe, and while the German plants are very inefficient, German laws make it illegal to close the plants there. To close any major manufacturing plant, you need the consent of the majority of the workers and the consent of the local council.

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