British business lowers prices to fight inflation
2023.01.25 04:21
British business lowers prices to fight inflation
By Tiffany Smith
Budrigannews.com – The unexpected price cuts made by British manufacturers in December were the largest since April 2020. This is good news for the Bank of England, which is considering how much higher interest rates it should raise to combat rising inflation.
The Office for National Statistics reported on Wednesday that output prices decreased by 0.8% in December in comparison to November.
According to the ONS, factory input prices decreased by 1.1% month-over-month, marking the largest decrease since April 2020, when a significant portion of Britain’s economy was shut down as the coronavirus outbreak began.
Reuters polled economists and found that they expected producer output prices to rise by 0.3 percent monthly and input prices to fall by 0.6 percent monthly.
The consumer prices index—Britain’s primary indicator of inflation—fell in November and December, but at 10.5%, it is still higher than the BoE’s target.
The central bank is keeping an eye out for signs of rising inflation. On February 2, investors anticipate the Bank of England (BoE) to raise interest rates for the tenth time in a row, most pricing in an additional half percentage point increase to 4%.
After the statistics office discovered issues with the prices data it uses, the ONS published the data on producer price inflation for November and December later than is typical.
In December, output prices decreased by 14.7% on an annual basis, marking the fifth consecutive slowdown, and input prices increased by 16.5%, marking the sixth consecutive slowdown from a record high of 24.6%.
According to the ONS, output prices decreased by 0.1 percent monthly and increased by 16.2 percent annually in November, while input prices decreased by 0.2 percent and increased by 18.0 percent.
It claimed that headline indices were not significantly affected by revisions related to its data corrections dating back to January 2021.
