Factory Gate Inflation Up
Factory Gate Inflation, the inflation rate for the production of goods, is up for a third month in a row and stays at its highest rate in 16 years, according to data from the Office of National Statistics. The figure now stands at 5%.
Input prices such as high oil and food prices are to blame for the continued rise in factory gate prices and hence FGI is up and inevitably the price rises will eventually be passed on to consumers who themselves have faced rises in both fuel and food.
After the interest rate freeze last week, this can only add more pressure to the Bank of England’s monetary policy committee to lower the rate from 5.5% next month.
In November Factory Gate Inflation was 4.5% up from 3.8% in October 2007. December’s figure was only expected to be as high as 4.6%.
The last time Factory Gate Inflation was so high was in August 1991 when it reached 5.2%