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Factory Gate Inflation Rises To 28-Month High

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More to come, good job the bankrupt of england have a good handle on inflation.


11 March 2011 Last updated at 11:48

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Factory gate inflation rises to 28-month high

Steel strips The rise in raw material costs will concern the Bank of England as it tries to keep a lid on inflation.

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* Bank resists pressure to up rates

* Manufacturing costs at two-year high

UK factory gate inflation hit a 28-month high in February, fuelled by rising oil and food prices.

Figures from the Office for National Statistics showed that producer output prices increased 0.5% on the month to an annual rise of 5.3%.

Input prices rose 1.1 in February, taking their annual rate to 14.6%.

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Output inflation running at 5.3% which is strangely in line with RPI, although not sure how long they can absorb the difference with input inflation running at 14.6%.

If we get any meaningful commodity bust, which may happen along with a stock market fall, then surely RPI/CPI will fall fast like it did in 2009, then cue the excuse to QE more.

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Given the amount by which CHF has strengthened over the last couple of years it's pretty telling that they are managing to get any inflation there at all.

Then again looking at the amount GBP has dropped by, it's strange that UK inflation figures aren't stronger. Or then again, maybe not that surprising given that official figures seem to be heavily massaged to be as low as possible.

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