UK's producer prices in March grew at the slowest annual pace in 20 months as prices for petroleum products declined sharply amid global recession, official data showed Thursday. A separate report showed that Britain's visible trade deficit narrowed slightly in February.
The Office for National Statistics, or ONS, said output prices rose 2% on a yearly basis in March, but slower than the 3% increase seen in February. That was the lowest rate of annual increase since July 2007, when it rose 2%. Economists had expected output price inflation to ease to 2.1%. Month-on-month, output prices edged up 0.1%, after remaining flat in February.
The output price index excluding food, beverages, tobacco and petroleum rose 3.3% in the year to March compared with 3.7% in February.
At the same time, the input price index for materials and fuels purchased by manufacturing industry fell 0.4% from the previous year, reversing 1% increase in February. This is the lowest rate of annual increase since April 2007, when it fell 1.5%. From the previous month, prices rose 1%. Economists were looking for an annual 0.7% fall and a 0.9% monthly increase.
Separately, the statistical office said UK's visible trade deficit narrowed to GBP 7.3 billion in February from a revised deficit of GBP 7.8 billion in January. Economists had expected the goods trade deficit to contract to GBP 7.6 billion, while the ONS revised January's deficit from GBP 7.7 billion. In February, total exports of goods rose almost 2.5% month-on-month to GBP 18.9 billion, while total imports of goods fell nearly 0.5% to GBP 26.2 billion.
The trade deficit with non-EU countries contracted to GBP 4 billion compared with the revised deficit of GBP 5.6 billion in January, which was initially reported as a deficit of GBP 5.7 billion. Exports to non- EU countries rose 13%, while imports from those countries fell 5.5%
Exports to EU countries fell 4.5% whereas imports from EU countries rose 5%, ONS said. The deficit with EU countries was GBP 3.4 billion in February, compared with a deficit of GBP 2.2 billion in January.
However, the trade in services showed a surplus of GBP 4.1 billion, compared with a surplus of GBP 4.7 billion in January. Earlier, the surplus in January was reported at GBP 4.2 billion.
Hence, there was a total trade deficit of GBP 3.2 billion in February, compared with the deficit of GBP 3.1 billion in January, which was revised from a deficit of GBP 3.6 billion initially reported.
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