U.K. producer prices in August dropped by the most in at least 22 years. In non-seasonally adjusted terms prices rose 26% in August on an annualized basis, down from the 29.3 rise seen in July. Seasonally-adjusted input prices declined 2.0% against general market expectations of a fall around 1.2%. The fall in the input index mainly reflected the fall seen in the price of oil. Month on month output PPI contracted 0.6%, following July’s 0.5% increase and against expectations of a small 0.1% rise. The data is increasing hopes that inflationary pressures might just have peaked, and that this will give the Old Lady more latitude to ease monetary policy. This prospect of potentially lower interest rates has seen cable slip back to 1.7655 at writing.