Holly $%%^ Batman have you seen the inflation numbers in the UK! PPI = 10%
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHDxY5b2oQdQ&refer=home
.K. Producer Prices Rise at Fastest Pace Since 1986 (Update3)
By Brian Swint
July 14 (Bloomberg) -- U.K. producer prices increased at the fastest pace in at least 22 years in June, making it harder for the Bank of England to cut interest rates as the economy edges toward a recession.
Prices charged by factories rose 10 percent from a year earlier, the most since comparable records began in 1986, the Office for National Statistics said in London today. Economists forecast 9.9 percent, according to the median of 28 estimates in a Bloomberg News survey. Prices increased 0.9 percent from May.
Manufacturers have raised prices to pass on the burden of record oil costs, undercutting living standards as Britain faces the prospect of its first recession since 1991. The Bank of England kept its benchmark interest rate at 5 percent on July 10 after inflation reached the fastest pace in more than a decade.
``These are a ghastly set of numbers,'' David Page, an economist at Investec Securities in London, said in an interview on Bloomberg Television. ``It really leaves the Monetary Policy Committee on the horns of a dilemma. We are seeing an economy close to a recession but we see a risk of inflation rising to 4.5 percent by the end of the quarter.''
Brent crude oil prices rose to a record $147.50 on July 11. Along with rising food costs, that is adding to the burden of consumers already feeling the pinch of tighter credit, and eating into company earnings. British Polythene Industries Plc, Europe's largest producer of plastic packaging, said July 3 that the company's price increases won't be enough to cover the higher cost of materials and that profit margins will decline.
Credit Crunch
``We are dealing with a trebling of oil prices, we are dealing with a doubling of food prices, and we are dealing with the credit crunch,'' Prime Minister Gordon Brown told reporters in London today. ``Yes we will consider further measures. We are trying to do what we can to help hard-pressed households.''
The annual gain in output prices was last higher in February 1982, the statistics office said. Records before 1986 use a different measure of manufacturing that excludes petroleum refining.
Britain is headed for ``quite a recession,'' former Bank of England policy maker Charles Goodhart said last week. Policy maker Kate Barker says that the central bank is worried that it will weaken the economy more than needed to control inflation by keeping monetary policy ``too tight,'' according to an interview published in the London-based Times today.
Interest Rate
At 5 percent, the Bank of England benchmark rate is the highest of the Group of Seven industrialized nations. In the U.S., the rate is 2 percent and on July 3 the European Central Bank lifted the main rate for the 15 euro nations a quarter-point to 4.25 percent to fight the fastest inflation since 1992.
The pound was little changed after today's report at $1.9867 as of 11:50 a.m. in London. It was at 79.87 pence per euro.
In the U.K., raw material costs jumped 30.3 percent from a year earlier, the most since the series started in 1986, with crude oil costs accounting for more than half the increase. Input prices rose 2.1 percent from May. Prices for home-produced food and metals fell.
Sterling has fallen 12 percent against the currencies of its main trading partners over the past year, pushing up the cost of imported goods. The price of imports rose 20 percent in June from a year earlier.
Dairy Costs
Robert Wiseman Dairies Plc, Scotland's largest provider of fresh milk, said July 3 that it aims to raise selling prices again after energy and packaging costs increased further.
Core producer prices, which exclude food, beverages, tobacco and petroleum, rose an annual 6.4 percent, the most since April 1982. Prices rose 0.3 percent from May. The monthly rate of increase fell from 1.4 percent as scrap metal prices slipped.
Consumer-price inflation surged to 3.3 percent in May, the highest since the U.K. central bank was given control over interest rates in 1997. King said the rate may exceed 4 percent later this year.
For interest rates, ``the next move will be down but it won't be for a couple of months,'' said Howard Archer, chief U.K. economist at Global Insight Inc. in London. ``There's mounting evidence that the downturn is deep. The economy will stagnate at best later this year.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHDxY5b2oQdQ&refer=home
.K. Producer Prices Rise at Fastest Pace Since 1986 (Update3)
By Brian Swint
July 14 (Bloomberg) -- U.K. producer prices increased at the fastest pace in at least 22 years in June, making it harder for the Bank of England to cut interest rates as the economy edges toward a recession.
Prices charged by factories rose 10 percent from a year earlier, the most since comparable records began in 1986, the Office for National Statistics said in London today. Economists forecast 9.9 percent, according to the median of 28 estimates in a Bloomberg News survey. Prices increased 0.9 percent from May.
Manufacturers have raised prices to pass on the burden of record oil costs, undercutting living standards as Britain faces the prospect of its first recession since 1991. The Bank of England kept its benchmark interest rate at 5 percent on July 10 after inflation reached the fastest pace in more than a decade.
``These are a ghastly set of numbers,'' David Page, an economist at Investec Securities in London, said in an interview on Bloomberg Television. ``It really leaves the Monetary Policy Committee on the horns of a dilemma. We are seeing an economy close to a recession but we see a risk of inflation rising to 4.5 percent by the end of the quarter.''
Brent crude oil prices rose to a record $147.50 on July 11. Along with rising food costs, that is adding to the burden of consumers already feeling the pinch of tighter credit, and eating into company earnings. British Polythene Industries Plc, Europe's largest producer of plastic packaging, said July 3 that the company's price increases won't be enough to cover the higher cost of materials and that profit margins will decline.
Credit Crunch
``We are dealing with a trebling of oil prices, we are dealing with a doubling of food prices, and we are dealing with the credit crunch,'' Prime Minister Gordon Brown told reporters in London today. ``Yes we will consider further measures. We are trying to do what we can to help hard-pressed households.''
The annual gain in output prices was last higher in February 1982, the statistics office said. Records before 1986 use a different measure of manufacturing that excludes petroleum refining.
Britain is headed for ``quite a recession,'' former Bank of England policy maker Charles Goodhart said last week. Policy maker Kate Barker says that the central bank is worried that it will weaken the economy more than needed to control inflation by keeping monetary policy ``too tight,'' according to an interview published in the London-based Times today.
Interest Rate
At 5 percent, the Bank of England benchmark rate is the highest of the Group of Seven industrialized nations. In the U.S., the rate is 2 percent and on July 3 the European Central Bank lifted the main rate for the 15 euro nations a quarter-point to 4.25 percent to fight the fastest inflation since 1992.
The pound was little changed after today's report at $1.9867 as of 11:50 a.m. in London. It was at 79.87 pence per euro.
In the U.K., raw material costs jumped 30.3 percent from a year earlier, the most since the series started in 1986, with crude oil costs accounting for more than half the increase. Input prices rose 2.1 percent from May. Prices for home-produced food and metals fell.
Sterling has fallen 12 percent against the currencies of its main trading partners over the past year, pushing up the cost of imported goods. The price of imports rose 20 percent in June from a year earlier.
Dairy Costs
Robert Wiseman Dairies Plc, Scotland's largest provider of fresh milk, said July 3 that it aims to raise selling prices again after energy and packaging costs increased further.
Core producer prices, which exclude food, beverages, tobacco and petroleum, rose an annual 6.4 percent, the most since April 1982. Prices rose 0.3 percent from May. The monthly rate of increase fell from 1.4 percent as scrap metal prices slipped.
Consumer-price inflation surged to 3.3 percent in May, the highest since the U.K. central bank was given control over interest rates in 1997. King said the rate may exceed 4 percent later this year.
For interest rates, ``the next move will be down but it won't be for a couple of months,'' said Howard Archer, chief U.K. economist at Global Insight Inc. in London. ``There's mounting evidence that the downturn is deep. The economy will stagnate at best later this year.''