U.K. March Factory Prices rise to highest levels in nine years.

The U.K. factory-price index rose last month March to its highest level since 1999, as the Chartered Institute of Purchasing and Supply’s gauge of producer priced rose to 60.6 which is the highest since records began; a further indication that the Bank of England would be wise to wait prior cutting interest rates further as expected during the year.

The slowdown that has been experienced across the rest of the UK economy especially in the financial sector has not been replicated in the manufacturing industry yet.

In the meantime European manufacturing growth has slowed for two consecutive months.

Dominic White, an economist at ABN Amro Holding NV said of the survey: “it is evidence that factories are passing on their costs to customers and symptomatic that they’re operating quite close to full capacity and so we see the next rate cut in May.”

The report itself represents mixed results for the UK manufacturing industry, as a slowdown in the global economy weighs down exports, although a fall in sterling exchange rates will makes exports more competitive especially as predicted in the euro region where most the largest basin for the country’s exports.

The greatest source of problems for the industry is the increasing cost of raw materials as an index of raw-material costs reveled a rise to 76.3, the highest since 1995, up by 0.6 from February.

Story link: U.K. March Factory Prices rise to highest levels in nine years.