Friday, November 6, 2009

UK producer input price inflation jumps in Oct

UK producer input price inflation jumps in Oct

The Office for National Statistics said input prices rose 0.1 percent on the year after a 6.2 percent annual fall in September, confounding analysts' expectation for a decline of 1.3 percent. The figures suggest pressures are building up at the start of the inflation pipeline. The Bank of England expanded its quantitative easing programme on Thursday but said it expected inflation to pick up sharply in the near term. The pick-up in input price inflation was driven by a 0.8 percent annual rise in crude oil prices, the biggest increase since October 2008.

Posted by cat and canary @ 12:46 PM (1453 views)
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9 thoughts on “UK producer input price inflation jumps in Oct

  • waitingfor hpc says:

    well in my factory we have seen a 30% rise in raw material priecs in the last 4 WEEKS, with more forecast for January. HYPERINFLATION IS BACK – thanks to Labour and the BOE!!

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  • waiting- the question though is IF you can pass that on to your clients or will margins be squeezed all the way down the food chain. Then we are left with elasticity issues.

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  • waitingfor hpc says:

    techieman – we are trying to pass it on now – but as quick as we pass them on , along comes another increase!! I am not joking when I say this is the worst I have ever seen it in my working career!

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  • cat and canary says:

    w4hpc, 30% is huge.

    BoE outlook currently says..

    Inflation is likely to rise sharply to above the 2% target in the near term, reflecting higher petrol price inflation and the reversal of last year’s reduction in VAT. …On balance, the Committee believes that the prospect is for a slow recovery in the level of economic activity, so that a substantial margin of under-utilised resources persists. That will continue to bear down on inflation for some time to come, offset in the short run by the impact of the past depreciation of sterling.

    BoE position is starting to sound very precarious. If they’re wrong then perhaps we could see a >30% inflation spike as in the 1800s?

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  • w4hpc,

    If you don’t mind me asking – what sort of business do you work in?

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  • waitingfor hpc says:

    we are in export packing – we make boxes to ship stuff. there aint many exports left – and we are not seeing an export led recover either!!
    my customers are seeing metal prices going up – every commodity imported is going up at the factory gate as we speak – and by huge ammounts as well!

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  • Very interesting – thanks.

    I’ve always thought the people that say it’s ok to print money so long as prices aren’t going up are dangerously misinformed about what inflation actually is. It’s akin to saying it’s ok to smoke, but you have to make sure you stop when you get sick.

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  • the number cruncher says:

    My main business is putting up prices – we held them all last year, but prices must go up and wages are on freeze.

    My main competitors are putting up prices after a freeze last year as well.

    Trying to predict how this will pan out is hurting my brain. I suppose the real answer is very complex, with different inflation/deflation rates for different areas of the economy and goods and services.

    I should imagine it will be deflation for the service industry and inflation for manufactured goods, energy and food. The big looser at the moment are workers and living standards. in a fair world it would be owners of over inflated assets that should take a hit, but this tawdry excuse for a government will not allow it (and I think the Tories will be worse)

    I have lost a lot of money through bad debts, about 4% of my turnover so far this year.

    Its all making me feel a little blue, as I stare across the office, my business and our jobs are quite safe, but a few of our admin ladies have husbands and young sons who have been out of work for some time.

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  • This is a little off base, but I am in Canada at the moment; what has struck me is the price of food. Here the average grocery item is about CDN$4.00, even at $1.75 to £1 exchange to sterling thats £2.20 an item; and its accepted here as normal..UK food prices are currently very cheap compared to that, if sterling weakens further food prices can only rise significantly in UK.

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