By Max Clarke
The UK’s Producer Price Index of inflation, the measure of prices UK manufacturers pay for goods, has risen by a further 0.9% to reach 5.4%.
“With Brent crude hitting new multi-month highs seemingly every day, and other commodity prices making gains, factory gate inflation was never going to be quiet,” explained Jeremy Cook, World First exchange chief economist.
Input prices- goods bought by manufacturers- rose 3.7% over the past month making a yealr increase of 14.6%. Much of this has been buoyed by soaring oil costs. Uncertainty of production in Libya this morning led to yet another record high in the price of Brent crude.
“If the UK can combine this rise with an increase in consumer prices and a good GDP figure towards the end of the month”, continued Cook, “then we would expect the MPC to raise interest rates at their May meeting…”