British manufacturers’ raw materials costs rose at their sharpest pace in four and a half years in January as the price of crude oil and imported goods surged.
The Office for National Statistics said producer input prices rose a seasonally adjusted 3.4% last month – the sharpest pace since May 2000 and more than twice the rate predicted by analysts. That took input prices 9.4% higher on the year, the steepest increase since October 2000.
Non-seasonally adjusted output prices fell 0.1% on the month and were up 2.6% on the year. This was the lowest annual rate of inflation at the factory gate since July.
However, core output prices, which exclude food, beverages, tobacco and petroleum products rose a seasonally 0.2% on the month, taking them up 2.5% on the year.
The ONS said the main reason for the surge in input prices was a sharp increase in the cost of crude oil. This shot up 14.8% in January, the biggest jump since August, leaving it 40.9% higher on the year.
But even allowing for the oil effect, core input prices rose sharply, by 1.9% in January – the largest monthly rise in 10 years – as the cost of some imported materials rose sharply. They were up 2.9% on the month, the biggest jump since comparable records began in Januay 1991.