UK producer prices rise on surging oil costs

| March 11, 2011 | 0 Comments

The Office for National Statistics (ONS) today revealed UK producer output prices increased 0.5% on a monthly basis in February, taking the annual rate to 5.3% - the highest since October 2008 and the fifth monthly gain.

Meanwhile, producer input prices for February were 14.6% higher on an annual basis – also the highest rate since October 2008 - suggesting inflationary pressures are continuing to mount.

However, both figures were in line with forecasts and were attributed to higher costs of oil and imported metals and materials.

Oil input prices are 33.5% higher than this time last year.

The figures will no doubt unnerve the Bank of England’s Monetary Policy Committee, who yesterday opted to keep interest rates at the record low of 0.5% despite soaring inflation.

UK inflation is currently running at 4% - double the 2% target.

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