Home News UK’s Producer Inflation Declines to 12-Month Low

UK’s Producer Inflation Declines to 12-Month Low

  • Producer input prices rose by 12.7% in the 12 months to February 2023, down from 14.7% in the year to January 2023.
  • Producer output (factory gate) prices rose by 12.1% in the 12 months to February 2023, down from 13.5% in the year to January 2023.
  • Inputs of crude oil and petroleum products provided the largest downward contributions to the change in the annual rates of input and output inflation, respectively.
  • On a monthly basis, producer input prices decreased by 0.1% and output prices decreased by 0.3% in February 2023.
  • This month’s Producer Price Index (PPI) estimates are being published with updated weights in line with the annual chain-linking methodology

2.Producer price inflation rates

The annual rate of the input Producer Price Index (PPI) has now been positive for 27 consecutive months, although it has been slowing for the last eight months. The annual rate is now 11.8 percentage points below its record annual high of 24.5% in June 2022 (Figure 1).

The annual rate of the output PPI has now been positive for 26 consecutive months, but it has been slowing for the last seven months. It is down 7.7 percentage points from its recent peak of 19.8% in July 2022. The index levels for both input and output prices have been broadly stable since June 2022 after a period of rapid increase starting in 2021 and continuing into early 2022. This levelling out has the effect of creating a fall in the annual inflation rate.

3.Input producer price inflation

Monthly producer input prices fell by 0.1% in February 2023, following a 0.4% increase in January 2023 (Table 1). The monthly rate reached a record high of 5.1% in March 2022.

Source: Office for National Statistics of the UK
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