Raw materials raise UK's PPI
February 6, 2010, Saturday
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British producer prices rose 3.8 percent in the year through January, up from the 3.5 percent rate reported a month earlier, due to the rising cost of petroleum and manufactured goods as well as tobacco and alcohol, the national statistics agency said yesterday.
Excluding tax rises which took effect in January, the Producer Price Index -- which measures the cost of goods at the factory gate -- was up 3.5 percent, the Office for National Statistics said.
"January's further appreciable rise in producer prices maintains concern that consumer price inflation will not only spike up to 3.5 percent or higher in the near term but could also prove stickier than hoped thereafter," said Howard Archer, an economist at IHS Global Insight.
The government's official target is to hold inflation at 2 percent or less.
The statistics agency said input prices for materials and fuels were up 8.4 percent in the year to January, partly reflecting the recovery of oil prices. The input price index rose 2 percent between December and January.
The Bank of England expects consumer and producer prices to ease back down in coming months due to sluggish demand. The weak state of the economy was evident in a separate report by the Insolvency Service, which said personal bankruptcies in England and Wales reached a record high in 2009 and that company insolvencies were the highest since 1993.
A total of 134,142 people went bankrupt or took out an Individual Voluntary Arrangement or Debt Relief Order during the year, the agency said. That topped the previous high of 107,288 in 2006.
There were 35,574 personal insolvencies in the fourth quarter, up 25 percent from a year earlier.
Company insolvencies totaled 19,077, the highest figure since 1993 but lower than the record of nearly 25,000 set in 1992.
The 4,566 company insolvencies in the fourth quarter was down 1.7 percent from the previous quarter and 1.1 percent below a year earlier.
If inflationary fears rise and the Bank of England raises its key lending rate from the current all-time low of 0.5 percent, the number of personal insolvencies is likely to accelerate, said Alan Tomlinson, an insolvency specialist.
Excluding tax rises which took effect in January, the Producer Price Index -- which measures the cost of goods at the factory gate -- was up 3.5 percent, the Office for National Statistics said.
"January's further appreciable rise in producer prices maintains concern that consumer price inflation will not only spike up to 3.5 percent or higher in the near term but could also prove stickier than hoped thereafter," said Howard Archer, an economist at IHS Global Insight.
The government's official target is to hold inflation at 2 percent or less.
The statistics agency said input prices for materials and fuels were up 8.4 percent in the year to January, partly reflecting the recovery of oil prices. The input price index rose 2 percent between December and January.
The Bank of England expects consumer and producer prices to ease back down in coming months due to sluggish demand. The weak state of the economy was evident in a separate report by the Insolvency Service, which said personal bankruptcies in England and Wales reached a record high in 2009 and that company insolvencies were the highest since 1993.
A total of 134,142 people went bankrupt or took out an Individual Voluntary Arrangement or Debt Relief Order during the year, the agency said. That topped the previous high of 107,288 in 2006.
There were 35,574 personal insolvencies in the fourth quarter, up 25 percent from a year earlier.
Company insolvencies totaled 19,077, the highest figure since 1993 but lower than the record of nearly 25,000 set in 1992.
The 4,566 company insolvencies in the fourth quarter was down 1.7 percent from the previous quarter and 1.1 percent below a year earlier.
If inflationary fears rise and the Bank of England raises its key lending rate from the current all-time low of 0.5 percent, the number of personal insolvencies is likely to accelerate, said Alan Tomlinson, an insolvency specialist.
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