June factory gate inflation in UK hits double digits

Factory gate inflation hit double digits for the first time since comparable records began and manufacturers' costs jumped by a record 30 per cent on the year in June, official data showed yesterday.

The Office for National Statistics said that output prices rose 0.9 per cent on the month in June, taking the annual rate up to 10.0 per cent - the highest rate since 1986.

Input prices rose a seasonally adjusted 2.1 per cent, taking the annual rate up to 30 per cent - also the highest since the series began in 1986 as food and fuel prices rocketed. The figures will do little to assuage Bank of England policymakers' fears over rising inflation even as the economy slows. Data today are likely to show another rise in consumer price inflation, already running at the highest rate in more than a decade.

The only bright spot for the central bank in June's producer prices data was a smaller than expected rise in core output prices on the month - up 0.3 per cent - the weakest since November 2007. Analysts had expected a rise of 0.8 per cent.

The ONS said this was because scrap metal prices had remained broadly steady after surging higher in previous months.

The annual rate of core output price inflation, however, jumped to 6.3 per cent - the fastest since April 1982.