UK CPI For February Slows But In Line With Expectations; PPI Falls More Than Expected; Fall In Motor Fuels, Input Prices Responsible

Bank of England
Commuters cycle past the Bank of England (C) in the City of London, on Aug.7, 2013. Reuters/Toby Melville

Consumer price inflation, or CPI, in the UK grew in February at a slightly slower rate than it did in January, data from the Office for National Statistics, or ONS, showed Tuesday.

The CPI grew by 1.7 percent in the year to February, down from 1.9 percent in January, a release from ONS noted, adding that the slowing of growth was mainly due to a fall in the prices of motor fuels and certain household goods such as clothing and footwear. The slower growth in CPI was in line with a consensus estimate from the Wall Street Journal.

On the other hand, the producer price index, or PPI, rose 0.5 percent in the year to February, compared with a rise of 0.9 percent in the year to January. The slowing of growth in PPI was mainly due to a stagnation of factory gate prices over the previous month, and a steep fall in the prices of raw materials, or input prices. The overall price of materials and fuels bought by UK producers for processing (total input prices), fell 5.7 percent in the year to February, compared with a fall of 2.9 percent in the year to January, ONS reported.

“Core factory gate prices, which exclude the more volatile food, beverages, tobacco & petroleum products, rose 1.1% in the year to February, compared with a rise of 1.2% in the year to January,” the release added. “Total input prices fell 0.4% between January and February, compared with a fall of 0.9% between December 2013 and January 2014."

A Wall Street Journal consensus estimate had pegged the PPI to grow at 0.7 percent and input prices to fall by 0.2 percent, month-on-month.

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