The latest Producer Price Index (PPI), which measures the price changes of goods brought and sold by manufacturers on a monthly basis, showed that output or ‘factory gate’ prices for goods produced rose by 0.3% in the year to July. This is compared to a fall of 0.2% in the year to June.
These figures mark the first since the EU referendum and ensuing Brexit decision, showing a level of volatility as a result of the verdict. However, while this is the first time that factory gate prices have risen since June 2014, the PPI has been following an upward trend since August of last year.
More worryingly, the overall price of materials and fuel bought by UK manufacturers for processing (known as ‘total input prices’) rose by 4.3% in the latest figures, which bucked the trend for the year to June, which had seen a fall of 0.5%. Again, however, total input prices have been rising since November 2015, with a slight blip in April.
The ONS also revealed a rise in inflation, as measured by the Consumer Prices Index (CPI). July’s CPI rose to 0.6% in July, up from 0.5% in June.
"There was no obvious impact on today's consumer prices figures following the EU referendum results though the Producer Prices Index suggests the fall in the exchange rate is beginning to push up import prices faced by manufacturers," said Mike Prestwood, head of prices at the ONS.
"These are the first sets of consumer and producer prices data collected since the referendum polling day."
