Factory Gate Inflation Rise

[Bob Loblaw]

http://www.bbc.co.uk/news/business-12189621

The price of goods leaving UK factories rose faster in December than in the previous month, largely due to the increased price of oil, the Office for National Statistics (ONS) has said.

Annual producer output price inflation rose to 4.2%, compared with an upwardly revised 4.1% in November.

The biggest factor in the rise was a 12.8% increase in petrol prices.

Increases in factory prices enhance concerns over knock-on effects for consumers, analysts say.

"This is primarily an oil and commodity price effect," said Peter Dixon at Commerzbank.

"It is going to raise pressure on the Bank of England [to raise interest rates] because output prices were up 0.5% on the month, which is quite a chunky amount."