In the year to November 2024, UK producer input prices fell by 1.9%, an improvement from the revised 2.4% decline recorded in October. Despite this year-on-year decrease, there was no change in input prices from October to November. On the other hand, producer output prices (factory gate prices) decreased by 0.6% in the year to November, a smaller decline compared to the 0.9% drop in October. Month-to-month, output prices rose by 0.3% in November, following a slight decrease of 0.1% in October.
The major drivers behind these price movements were fluctuations in crude oil and refined petroleum products. Crude oil contributed to the annual decrease in input prices, while refined petroleum products impacted the output price changes.
UK Producer Prices Show Improvement in November 2024
The Producer Price Index (PPI) for inputs, which measures the cost of goods and services purchased by producers, showed that six out of ten product groups contributed to the annual fall in prices. Notably, crude oil, other parts and equipment, and fuel were the largest contributors to the 1.9% decrease in input prices. Crude oil prices dropped 14.1% over the year to November, though this decline moderated from a steeper 21.3% fall in October. Fuel prices also decreased by 11.8%, with electricity and gas prices falling by 10.9% and 17.0%, respectively.
However, domestic food prices saw an uptick, rising by 0.4% over the year, providing a modest offset to the downward pressure on input prices. The increased cost of domestic food was partly attributed to a reduced supply of potatoes, which pushed prices higher.
The monthly data for both October and November 2024 remain provisional and are subject to revisions as more survey data becomes available.
Despite these positive trends, domestic food prices have seen a rise, partially offsetting the broader price reductions. These movements suggest ongoing volatility in certain sectors, such as energy and food, while broader trends show some stabilization in producer prices. However, further revisions and survey data in the coming months could lead to adjustments in these figures.
For the analysis and updates, visit FXAN to stay informed on the latest news and insights. Also, follow us on Instagram.