11 September 2006
Global Insight has stated it is a broadly reassuring view of producer price inflation in August from the Bank of England (BoE.)
Howard Archer, chief UK and European economist at the group, explained last month's BoE figures on the inflationary situation in the UK were "broadly very reassuring" and should alleviate concerns of pressures on the country's supply chain.
Mr Archer said: "It may modestly reduce expectations that interest rates will rise again before the end of the year, although the Bank of England will be more focussed on developments relating to consumer prices, wages and consumer spending."
The 0.2% month-on-month fall in core output prices last month was particularly noteworthy given July's flat out figures, he added.
Mr Archer concluded: "This [year-on-year fall] suggests that manufacturers are finding it very difficult to pass on their higher costs. Meanwhile, input prices eased back in August and they should benefit further in the near term at least from the recent marked softening in oil prices as well as sterling's overall stronger tone."
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