UK Producer prices fall in November

British producer prices and costs fell last month mainly driven by oil prices and petroleum product prices experiencing a sharp fall, as the Office for National Statistics reveal that output prices are down by 0.7 percent following on from Octobers 1 percent drop.

The Data released today is a further indication that inflationary pressures are cooling rapidly, as the annual rate of output price inflation down to 5.1 percent in November down by 1.6 percent5 from the previous month.

Input price inflation has similarly fallen to 7.5 percent from 15.4 percent and is at its lowest pace for over a year.

Within the period weakening economic growth has meant that companies are unable to recover costs simply by raising prices.

This has affected many companies as RPC Group Plc, the U.K. maker of plastic containers for Nivea sun cream announced a loss for the first half of the year due to the increase in polymer prices and energy costs which resulted in an already tight profit margin falling further.

This worrying trend is likely to further substantiate the view of the Bank of England that consumer price inflation will continue to fall and that sharp drops are to be expected due to the interest rate cuts.

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