UK manufacturers under price pressure

British manufacturers are back under pressure as figures showed the price of goods leaving factories registering only a slight…

British manufacturers are back under pressure as figures showed the price of goods leaving factories registering only a slight rise last month.

According to the Office for National Statistics (ONS), output prices inched up by just 0.1 per cent between August and September - half the growth rate seen the previous month.

The increase, which fell short of the 0.2 per cent rise economists had been predicting, leaves output prices 1.5 per cent up on September of last year.

Input prices, the cost of raw materials used by manufacturers, fell by 1.2 per cent - the biggest seasonally adjusted reduction for 10 months.

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However, the ONS said the month-on-month decrease primarily reflected a sharp drop in crude oil prices, which were down by 9.6 per cent.

With crude oil prices having recovered some ground in October, following OPEC's decision to cut production levels, input prices are set to rise again next month.

But stripping out volatile elements such as food, drink and petrol, the input price index fell by a more modest 0.1 per cent between August and September.

This means underlying input prices were actually higher than last year, up 0.1 per cent. Although only a slight increase, this was the most significant rise for more than two years.