Factory gate inflation falls again
The prices paid by manufacturers for the materials and fuels they use and the prices they charge customers for the goods they make have both fallen again, raising fears of deflation and prompting calls for the Bank of England’s Monetary Policy Committee to reduce interests rates further.
Figures from the Office for National Statistics today (8 December) showed output prices – otherwise known as factory gate inflation – fell 0.7% in November to 5.1%.
Input price inflation for the month fell 3.3% to 7.5% having peaked in June at a stratospheric 34.1%. The fall was mainly due to the fall in the price of oil.
With core prices predicted to fall back further, economists believe that the threat of deflation needs to be countered with a further cut in the current 2% interest rate that is already at a 57 year low.
