Industry's costs rise sharply in December
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.INDUSTRY'S fuel and raw material costs are rising more quickly than at any time for three years, reflecting the upward pressure on import prices from the fall in the pound since Black Wednesday.
Manufacturers' input costs in December were 5.2 per cent higher than a year earlier, the Central Statistical Office said yesterday. This was up from 4.3 per cent in November, but lower than the 6 per cent expected in the City.
City economists fear that higher input prices will feed through to prices in the shops in the coming months and could push underlying inflation above the Chancellor's 4 per cent target ceiling.
Input prices rose by 0.1 per cent between November and December, adjusting for normal seasonal changes, following rises of 2.5 and 2.2 per cent in the two preceding months. 'This levelling off may indicate that most of the effect of sterling's depreciation on import prices has now fed through,' said Anthony Nelson, Economic Secretary to the Treasury.
There is little sign that higher input costs have yet fed through to manufacturers' output prices. Excluding volatile food, drink and tobacco prices, output prices rose by 2.4 per cent in the year to December, unchanged on November.
The annual rate of increase in all output prices rose to a six- month high of 3.5 per cent in December, up from 3.3 per cent in the preceding month.
Chris Dillow, of Nomura, said the unexpectedly good news on producer prices owed much to lower petrol prices and a firmer pound, and was likely to be temporary. Ruth Lea, of Mitsubishi Bank, said the Government was unlikely to reverse its 'go for growth' policy if inflation exceeded its target while unemployment was still rising.
Commentary, page 23
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments