–Mar producer output prices +0.9% m/m; +5% y/y
–Mar core producer output prices +0.7% m/m; +3.6% y/y
–Mar producer input prices +3.6% m/m; +10.1% y/y

LONDON (MNI) – Output price inflation in March rose to its highest
level since November 2008, boosted by the rising cost of petroleum
products, according to figures released by National Statistics Friday.

The rise in inflation at the producer level, which was far more
than analysts had expected, is likely to feed through to consumer prices
over the coming months.

Output prices rose by 0.9% on the month in March to stand 5% above
levels a year earlier, the highest annual growth since November 2008.
The latest monthly rise was more than double the median forecast from
City analysts for a rise of 0.4% on the month. On the year, analysts had
forecast a rise of 4.4%.

Petroleum product prices rose 3.9% between February and March,
mainly due to a 4.8% rise in gas oil and diesel prices and a 2.5%
increase in unleaded petrol prices.

There was also upward pressure from other manufactured product
prices which increased by 1.2% on the month in March, mainly due to a
5.1% rise in the price of recovered secondary raw materials, especially
scrap metal.

Chemical prices rose 1.4% on the month, the largest monthly rise
since July 2008.

While many commentators have pointed to erratic items such as
petrol prices and food being responsible for most of the rise in
inflation recently, core output prices which exclude food, beverages,
tobacco and petrol also rose sharply in March.

Core prices were up 0.7% on the month and 3.6% on the year, above
the median forecast of 0.3% and 3.1% respectively.

A sharp rise in crude oil prices of 9.7% on the month in March,
pushed input prices higher.

Input prices leapt 3.6% on the month and were up 10.1% on the year,
way above the median forecast for a 1.2% monthly increase and a rise of
7.2% on the year.

The rise in input prices on the year was nearly wholly due to the
increase in crude oil prices over the past 12 months.

There was also some evidence of the weaker value of sterling
pushing prices higher, although National Statistics said that most of
the higher costs were due to changes in commodity prices.

Imported metal prices rose 5.3% on the month in March and were up
14.4% on the year. The monthly increase was the largest since records
began in February 1991.

Other imported parts and equipment rose 2.7% on the month and by
4.6% on the year. The monthly increase was mainly due to increases in
the prices of imported motor vehicle parts and the price of imported
electronic valves, tubes and other electronic components.

The latest small rise in input prices was mainly due to rises in
the price of chemicals, other imported parts and equipment and other
imported materials. Gains here though were mostly offset by falls in the
price of fuels.

–London newsroom 4420 7862 7492 email: drobinson@marketnews.com

[TOPICS: MABDA$,M$B$$$,MT$$$$,MABDS$]