09/07/2010 - June fall in factory gate prices
Factory gate prices fell last month for the first time since the aftermath of the financial crisis nearly two years ago, official figures showed today.
The 0.3% fall - the first month-on-month decline since November 2008 - will help ease worries among some rate-setters over inflation, which is well above the Bank of England's 2% target at 3.4%.
The sharpest monthly fall in petrol costs for 18 months accounted for the bulk of the slide in output prices, which eased the annual rate of price increases to 5.1% from 5.5% in May.
Capital Economics' Vicky Redwood said: "June's producer prices figures provide further evidence of an easing in price pressures at the start of the inflation pipeline."
Input costs for manufacturers also fell 0.2% between May and June due to lower crude oil, petrol and metals prices, which brought annual increases down from 11.5% to 10.7%.
The better-than-expected figures are a boost to the Bank of England's stance that Consumer Prices Index inflation - which has stood at 3% or more throughout the whole of 2010 so far - will fall back to the 2% target.
Copyright © Press Association 2010
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