Factory gate inflation slowed to its lowest annual rate since May 2011 in October as input costs eased more than forecast, official data showed slowed to its lowest annual rate since May 2011 in October as input costs eased more than forecast, official data showed
The easing pipeline price pressures will come as welcome news for the Bank of England, that kept interest rates at t heir record lows and the target volume of asset purchases unchanged on
Thursday to support the fragile economy.
The policymakers expect that consumer price inflation, which is running at more than twice the Bank's 2 percent target t, will fall sharply early next year as the economic weakness weighs and one-offs such as the VAT tax hike fall out of the equation.
Producer output prices rose 5.7 percent on the year, below forecasts for an annual rise of 5.9 percent, the Office f or National Statistics said.
Input prices were 14.1 percent higher on the year, its lowest rate since December 2010 and compared with 17.7 percent t in September and against forecasts for an annual rate of 14.6 per cent. The slowdown in input price inflation was mainly due to a monthly drop in oil prices.
Core prices, which exclude volatile food and fuel costs, rose 3.4 percent on the year, the ONS said.
The Bank left policy unchanged on Thursday after saying last month it would inject a further 75 billion pounds into the economy to protect it against a renewed downturn as Europe t teeters on the brink.
A raft of gloomy data alongside a political and economic crisis threatening to blow the euro zone apart has intensified fears of another recession in Britain.
The economy grew by 0.5 percent in the third quarter, and construction data published in a separate release on Friday y gave no indication of any material revision to that number.
Construction output fell by 0.2 percent in the three months through September, less than the 0.6 percent drop the ON S had pencilled in its preliminary estimate of gross domestic product.
The revision was not large enough to have a noticeable impact on the GDP numbers, the ONS said.