Figures released today by the Office for National Statistics shows UK manufacturers raised output prices by a record 8.9 per cent over the last year.
Producer prices went up 1.6 per cent from April to May alone, signifying the highest monthly inflation since March 1982. The overall annual inflation is the highest since records for the period officially began in 1986.
Rising levels of input costs, which at 27.6 per cent for the year is also a new high, were blamed for the inflation. Costlier food and fuel products as well as the other products manufacturers used meant producer output price increases were unavoidable. There was a high rise, 20.9 per cent, in the cost of recovered secondary raw materials, particularly steel scrap, in the month to May. Crude oil has now registered a price increase of 83.8 per cent in the year to May and it will come as no surprise to learn that this, too, is a new record.
After petroleum, food and tobacco products, chemicals and metals made the biggest contributions to the yearly output rise. With record inflations almost across the board for products despite a slowing economy, analysts fear consumer industry repercussions.
Jonathan Loynes of Capital Economics told the BBC: “The increases are so large that at least some portion of them looks likely to work its way into the High Street, even if retail sales slump… The inflation problem is starting to spread beyond the food and energy sectors.”
A full breakdown of producer inflation by sector is available at www.statistics.gov.uk/ppi.