•         Producer price output annual inflation up from 5.4% in May to 5.7% in June


  • Producer price input annual inflation up for 16.1% in May to 17.0% in June


Commenting on the producer price figures for June published today by the ONS, David Kern, Chief Economist for the British Chambers of Commerce (BCC), said:   

“These figures were worse than expected with both input and output producer price inflation accelerating in the last month. Although the results are not entirely surprising, they will complicate the MPC’s job in the short term. The rise in inflation is uncomfortable, but largely due to factors that are outside the committee’s control. Responding to this increase in inflation by raising interest rates would not reduce prices in the short term and could risk triggering a major setback.   

 “The government’s deficit-cutting programme is already dampening demand and adding significantly to the pressures facing businesses and individuals. Our view remains that interest rate increases must be postponed at least until the fourth quarter of the year. On its part, the government must strengthen its efforts to stimulate growth and make every effort to ease regulations and other burdens facing wealth-creating businesses.”