Prices paid at factory gates in the U.K. rose to open the second quarter, with strong underlying price pressures continuing to keep inflation high, according to Financial Times. On Friday, the Office for National Statistics reported that producer output prices increased by 5.3% year-over-year in April, was slightly less than the 5.6% increase posted in the year to March. However, excluding an increase in duties, annual output price inflation was unchanged at 5.5% in April, which is the highest annual rate since October 2008.
The report showed that input prices added 17.6% in the year to April, surging up from 14.8% the month prior to mark the fastest such rate of inflation since September 2008. The increase in input prices has been driven by surging crude oil prices, although Chris Williamson of Markit said, “A further easing in manufacturing prices and inflation looks highly likely in the coming months.” Nonetheless, the spike in input price inflation is likely to keep upwards pressure on consumer prices, which are already double the 2% target set by the Bank of England.