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Uk Factory Gate Inflation Up 1% In January

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LONDON (Thomson Financial) - UK factory gate inflationary pressures soared during January, with input and core output prices posting their highest ever increases since records began 22 years ago.

The Office for National Statistics revealed that unadjusted output prices - which are monitored by the Bank of England as a signal of pipeline inflation - rose a monthly 1.0 pct in January, after a 0.4 pct increase in December - revised down from the previous reading of 0.5 pct. This was the highest monthly rise since January 1995 and well above analyst expectations for another 0.4 pct increase.

Difficult to ignore this one. Looks like Merv had better begin drafting his letter.


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i really hope the bunch of idiots that gordon has stuffed on the committee to dilute merv's influence dont ignore this data. sure the current downturn will be tough but when they slash interest rates to stabilize house prices and inflation just keeps on rising as the pound dumps and inflation expectations and wages continue to accelerate as people think the boe is just reflecting the politician's wishes, the ultimate downturn will be even more severe

i'm sick of the way the bank only seems to care about asset prices rather than real prices

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more inflationary chickens coming home to roost, at least for the short term...

from tomorrows Times:


British companies are facing their greatest inflationary pressures since modern records began in 1986, reducing the Bank of England's scope for more cuts of interest rates, figures from the Office for National Statistics revealed yesterday.

Input price inflation — the cost of materials to producers — surged to 18.9 per cent in the year in January, the strongest rate since the series began 22 years ago. In addition, the cost of goods from factories rose by their highest rate in January for more than 16 years and producer price inflation climbed 1 per cent on the month in January, taking the annual rate up to 5.7 per cent, from 5.0 per cent in December. Analysts had expected an annual reading of 5.1 per cent.

and the Mail:


Alarming increases in the cost of food and other goods were revealed in a new set of economic figures yesterday.

The prices companies must pay for raw materials soared at an annual rate of 18.9 per cent in January, the highest since records began 22 years ago.

............Tory spokesman Philip Hammond, said: "These figures make a mockery of Gordon Brown's boast of low inflation.

"Thanks to his incompetence, ordinary families are now faced with soaring food and fuel costs. With real takehome pay falling, they will be more squeezed than ever."

Research by the website mysupermarket.co.uk puts the increase on a typical shopping basket at 10 to 12.5 per cent over the past year.

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