U.K. Producer Prices Unexpectedly Rose in July
U.K. producer prices unexpectedly rose in July, a sign the recession may be easing enough for companies to charge customers more and rebuild their margins.
The price of goods at factory gates climbed 0.3 percent from June, the Office for National Statistics said today in London. Economists predicted no change, according to the median of 19 forecasts in a Bloomberg News survey. On the year, prices declined 1.3 percent, the most since November 2001.
Manufacturing unexpectedly expanded 0.4 percent in June as the recession moderated and factories benefited from the weakness of the pound. The Bank of England said yesterday that the economic contraction had been deeper than anticipated as it increased the program to buy bonds with newly created money to stave off the threat of deflation.
“There has been some ability to expand margins and activity has been improving,” said James Knightley, an economist at ING Financial Markets in London. “But given that the economy is fragile, I don’t think they’ll be able to do this every month. The inflation threat is still very limited.”
Consumer-price inflation slowed below the Bank of England’s 2 percent target for the first time in almost two years in June after accelerating to 5 free credit report and score.2 percent in September last year. The central bank publishes its new forecasts for economic growth and inflation on Aug. 12.
The increase in producer prices on the month was led by products such as scrap metal, chemicals, tobacco and alcohol products, the statistics office said.
Core Prices
Core producer prices, which exclude oil, food, tobacco and alcohol products, rose 0.5 percent on the month, exceeding the 0.1 percent median forecast in a Bloomberg News survey. They increased 0.2 percent in the year to July, the lowest annual rate since June 2004, officials said.
Cobham Plc, the world’s largest maker of airborne-refueling equipment, yesterday reported a 70 percent increase in first- half profit. The company said it “remains confident of continued high single-digit organic revenue growth over the medium term.”
Raw materials costs fell 1.4 percent in the month as crude oil prices dropped and the cost of imports fell, the statistics office said.
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