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Manufacturers See Input Prices Drop

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The prices paid by UK manufacturers posted the biggest drop in more than two years in August, official figures revealed today, as a period of high inflation for the sector appeared to pass its peak.

Producer input prices fell 1.9% last month, compared to a 0.5% increase in July, while prices charged by manufacturers to their customers slowed, increasing 0.1%, compared to a 0.3% boost the previous month.

The reduction in input prices was driven by a 5.9% dive in crude oil costs, fuelled by fears the global economy is heading back into recession, while weak demand squeezed manufacturers' pricing power.

The slowdown will ease pressure on the Bank of England to curb the high rate of consumer prices index (CPI) inflation, weakening the chance of an interest rate hike and increasing the likelihood of a further cash injection into the Bank's quantitative easing programme.

The softer figures, released by the Office for National Statistics, will be welcome relief to cash-strapped consumers who will hope to see the falling manufacturing costs passed on amid the biggest squeeze on household spending since the 1920s.

Quick someone turn on the printing press before we have deflation.

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  • 337 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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