16 November 2016
The UK inflation rate registered a surprise dip in October – but the cost of manufacturing goods increased for a fourth consecutive month.
Statistics released today by the Office for National Statistics showed the Consumer Prices Index fell to 0.9 per cent, down from 1.0 per cent in the previous month.
Falling prices for clothing, university tuition fees, overnight hotel stays, toy and games and non-alcoholic drinks have been cited as contributing factors.
The price of goods bought and sold by UK manufacturers – as estimated by the Producer Price Index – rose again in the year to October 2016.
Total output prices for manufacturers rose by 0.6 per cent, while the overall price of materials and fuels bought by UK manufacturers for processing increased by 12.2 per cent.
GBCC chief executive Paul Faulkner (pictured) said: “Contrary to many expert predictions, inflation fell in the month of October, bucking a trend which has seen a steady increase over the last few months.
However, once again we saw a large scale increase in costs for UK manufacturers.
“Similar to last month, besides rising fuel costs, it seems manufacturers are absorbing costs as opposed to raising their prices which would see a sharp increase in inflation figures.
“However, it remains to be seen how long this disconnect continues as most experts are forecasting a visible rise in inflation throughout 2017 due to the falling value of the pound post Brexit.
“These results will no doubt underpin the tone of next week’s Autumn Statement and it remains to be seen how the Chancellor plans to boost economic growth to offset business concerns around price pressures.
“In our last economic survey, local businesses expressed growing concerns around exchange rates.
“We are actively encouraging firms in our region to take part in our latest Quarterly Business Survey so we can effectively gauge if these are short term trends caused by the extraordinary political events of the last 12 months or whether this is reflective of deeper structural economic themes.”
Please click here to access the GBCC Quarterly Business Survey.