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U.k. Output Prices Increase Twice As Much As Forecast

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In two months output prices have risen nearly as much as the Bankrupt of England's Annual inflation target.

Unexpected again.

Crediblity? It is not a quesion of credibility, this is an issue of being incompetent and crooked.

http://www.bloomberg.com/news/2011-02-11/u-k-factory-gate-prices-faster-than-forecast-fueling-inflation-concerns.html

U.K. Output Prices Increase Twice as Much as Forecast

By Svenja O’Donnell - Feb 11, 2011 9:40 AM GMT

U.K. January Factory Gate Prices Surge

Services and manufacturing surveys this month indicated the economy’s contraction in the fourth quarter was a temporary setback, giving companies the scope to pass on higher costs to their customers. Photographer: Chris Ratcliffe/Bloomberg

U.K. Output Prices Increase Twice as Much as Forecast

An employee of Master Ropemakers rides a rope winding machine at their factory in Chatham dockyards, Kent, U.K. Photographer: Chris Ratcliffe/Bloomberg

U.K. producer prices rose twice as much as economists forecast in January, which may add to concerns the Bank of England is losing control of inflation.

The cost of goods at factory gates jumped 1 percent from December, when it rose 0.4 percent, the Office for National Statistics said today in London. That’s the most since April and exceeded the 0.5 percent median forecast of 14 economists in a Bloomberg News survey.

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Given the choice between a massive HPC and inflation (or stagflation) that will wipe away most of Brown's folly, I think Merv has ZERO choice.

HPI is the UK's recent past, present and future.

Unless someone can come up with an alternative industry that the Banksters can feed on.

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In two months output prices have risen nearly as much as the Bankrupt of England's Annual inflation target.

Unexpected again.

Crediblity? It is not a quesion of credibility, this is an issue of being incompetent and crooked.

http://www.bloomberg.com/news/2011-02-11/u-k-factory-gate-prices-faster-than-forecast-fueling-inflation-concerns.html

U.K. Output Prices Increase Twice as Much as Forecast

By Svenja O’Donnell - Feb 11, 2011 9:40 AM GMT

U.K. January Factory Gate Prices Surge

Services and manufacturing surveys this month indicated the economy’s contraction in the fourth quarter was a temporary setback, giving companies the scope to pass on higher costs to their customers. Photographer: Chris Ratcliffe/Bloomberg

U.K. Output Prices Increase Twice as Much as Forecast

An employee of Master Ropemakers rides a rope winding machine at their factory in Chatham dockyards, Kent, U.K. Photographer: Chris Ratcliffe/Bloomberg

U.K. producer prices rose twice as much as economists forecast in January, which may add to concerns the Bank of England is losing control of inflation.

The cost of goods at factory gates jumped 1 percent from December, when it rose 0.4 percent, the Office for National Statistics said today in London. That’s the most since April and exceeded the 0.5 percent median forecast of 14 economists in a Bloomberg News survey.

The MPC would have had this data to hand at this weeks meeting too. Maybe there were four votes for a raise buy nobody wanted to make the deciding vote.

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The MPC would have had this data to hand at this weeks meeting too. Maybe there were four votes for a raise buy nobody wanted to make the deciding vote.

I'd be surprised, I'd say it was still 2-5

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I guess the Bank of England response to this would be move along nothing to see here! Perhaps they could contact the Oxford English Dictionary and get them to change their definition of temporary.

Not everyone is so sanguine and an economist I follow points out that the numbers for producer prices have been manipulated downwards. So in reality they are even worse.

In reality the situation is in fact worse than this as the numbers have been “recalculated” by the ONS. I wrote on the 19th of November, the 14th of December and the 14th of January about a change in the way that the ONS calculates these figures. My conclusion is illustrated below.

This seems innocent enough but I have looked at the numbers for 2010 and this is its impact on the headline output number for produced price inflation for the months of this year so far. They are -0.3%,-0.4%,-0.5%,-1%,-0.5%,-0.7%,-0.8%,-0.5% and -0.6%.

http://t.co/umuFAyA

So these are numbers which have already been manipulated downwards.

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http://uk.finance.yahoo.com/news/Inflation-fears-factory-price-tele-1294728304.html?x=0

Inflation fears as factory price rises hit two-year high
Emma Rowley, 11:55, Friday 11 February 2011
Interest rates could still rise soon, economists said, as the biggest leap in the prices factories pay for their materials in more than two years underlined the inflation threat.
Input prices at factories
rose 13.4pc
in the year to January the strongest rise since October 2008 driven by the soaring cost of oil and other imports, the Office for National Statistics reported .

With house price falling Merv's hands are firmly tied. He can do nothing other than say he is vigilant.

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http://uk.finance.yahoo.com/news/Manufacturers-struggle-rising-tele-3683521058.html?x=0

Here is how economists reacted to the figures.

SAMUEL TOMBS, CAPITAL ECONOMICS

"January's producer prices figures provide a timely reminder that, despite yesterday's decision to keep rates on hold, the risk of a near-term hike in interest rates remains very much alive. At least these rises are at the very beginning of the inflation pipeline, so they will not feed through to CPI (CPI.AT - news) inflation until well into 2012. By then, the temporary factors currently pushing inflation up (such as the VAT rise) will have disappeared. As a result, we still think it is right to keep interest rates on hold. Nonetheless, today's figures may add to concerns about the likely persistence of inflationary pressures."

HOWARD ARCHER, IHS GLOBAL INSIGHT

"More nasty news on the inflation front for the Bank of England to digest. The data show mounting inflationary pressures in the supply chain, thereby keeping up the pressure on the Bank of England to raise interest rates sooner rather than later."

ROSS WALKER, RBS FINANCIAL MARKETS

"Another pretty grim set of data. The input numbers weren't quite as bad as we'd thought - we were some way above the consensus - but still above the median expectations. The news is on the output side, we've got a pretty hefty surge there in the month, so you've got evidence both of a pass through from those higher input costs, clearer evidence of that, and maybe some of this is spilling over from that food and energy shock into the core rate."

ALAN CLARKE, BNP PARIBAS (BNPQF.PK - news)

"Upward surprises across the board. It poses upside risks to consumer price inflation at the more medium-term horizon. I don't think it tells us much about next week's CPI (Berlin: CEJ.BE - news) , but what it does tell us is that elevated inflation is increasingly likely to become engrained in the system further down the road. So it reinforces the case for higher rates."

MERVYN KING, BANK OF ENGLAND (MuppetNews.Inc)

The interests of our financial instutions are best served by being vigilant and making sure that the bumps in the road do not set off a house price crash which would not serve the bank's best interests given the vast amount of money that has been lent over the past decade or so. I am therefore convinced that we must remain vigilant to preserve our housing market. If house prices were to fall my BTL portfolio and those of our friends in Parliamnet and the banks would suffer a great deal. The inflation we are seeing is blips, blobs and one-off phenomena. The important thing is to make sure house prices blah blah blah dee-blah blah

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With house price falling Merv's hands are firmly tied. He can do nothing other than say he is vigilant.

don't forget the deflation. There's so much deflation I don't know where to look! :lol:

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http://uk.finance.yahoo.com/news/Manufacturers-struggle-rising-tele-3683521058.html?x=0

Here is how economists reacted to the figures.

SAMUEL TOMBS, CAPITAL ECONOMICS

"...At least these rises are at the very beginning of the inflation pipeline, so they will not feed through to CPI (CPI.AT - news) inflation until well into 2012. By then, the temporary factors currently pushing inflation up (such as the VAT rise) will have disappeared.....

So, by the time one lot of "temporary factors" have gone, we'll have another lot of "temporary factors", eh?

Peter.

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Given the choice between a massive HPC and inflation (or stagflation) that will wipe away most of Brown's folly, I think Merv has ZERO choice.

HPI is the UK's recent past, present and future.

Unless someone can come up with an alternative industry that the Banksters can feed on.

Problem is, inflation is always a spiralling process, and as such, the more you wait to curb it, the harder it will be to curb it. Meaning, the interest rates hikes needed to curb it in the future will be much higher than if they curb it now. Imagine what those rates will do to house prices.

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don't forget the deflation. There's so much deflation I don't know where to look! :lol:

Yes, thank goodness inflation is apparently impossible or prices would be rocketing upward even more.

Obviously keeping base interest rates at almost zero is not enough - we need to start another round of QE in case we run short of money to pay for all these deflationary price increases. :lol:

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http://uk.finance.yahoo.com/news/Manufacturers-struggle-rising-tele-3683521058.html?x=0

(...)

MERVYN KING, BANK OF ENGLAND (MuppetNews.Inc)

The interests of our financial instutions are best served by being vigilant and making sure that the bumps in the road do not set off a house price crash which would not serve the bank's best interests given the vast amount of money that has been lent over the past decade or so. I am therefore convinced that we must remain vigilant to preserve our housing market. If house prices were to fall my BTL portfolio and those of our friends in Parliamnet and the banks would suffer a great deal. The inflation we are seeing is blips, blobs and one-off phenomena. The important thing is to make sure house prices blah blah blah dee-blah blah

:lol:

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      • down 5% +
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