UK DATA: Jun Producer Output Prices -0.4% m/m; 2.3% y/y
–Jun Core Producer Output Prices -0.2% m/m; 2% y/y
–Jun Input Prices -2.2% m/m; -2.3% y/y
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Output price inflation fell to its lowest level since Oct 2009 and
at the sharpest monthly pace since Nov 2008 in June. Output price
declines were below the median forecast while the fall in input prices
was in line with the median. The figures show a further welcome fall in
pipeline price pressures and a sharp fall in input prices also suggests
further falls to come. This slowdown in producer price inflation boosts
the likelihood that inflation at the consumer level will ease further as
the Bank of England expects over the coming months. Behind the output
price fall was a drop in petrol prices and also declines in chemicals,
and clothing. Input prices fell as crude oil prices fell 9.1% between
May and June, the largest monthly fall since December 2008.