BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Monday, 12 February, 2001, 11:07 GMT
Cheap oil takes factory prices down
Factory prices show the biggest fall in 15 years
Pressures on the cost of manufactured goods are weaker
The lower price of oil pushed down producer prices last month, supporting the Bank of England's interest rate cut.

The price of goods leaving British factories fell 0.4% in January from the month before.


Looking towards the Bank of England meeting next month, I think it does in a way make a rate cut slightly more likely.

Sharda Dean, Schroders
This is the biggest monthly fall in fifteen years. Analysts had been expecting a 0.1% monthly rise after a 0.2% fall in December.

"The figures are softer than expected and due to a respite in the oil price but I expect it to rise again", said Richard Jeffrey, chief economist at ING Barings.

Year-on-year, output prices were 1.9% higher in January.

The Office for National Statistics figures also showed a 0.5% increase in raw material costs from December, after a fall last month of 4.2%.

The rise of input costs was due to higher prices for food and imported materials

Raft of data

"From that data, looking towards the Bank of England meeting next month, I think it does in a way make a rate cut slightly more likely because it does show there are still quite intense competitive pressures out," said Sharda Dean, UK and Eurozone economist at Schroders.

"So it does look like we'll probably see quite a good retail price figure on Tuesday as well."

The producer price figures are the first in a raft of economic data due this week which includes the latest UK retail sales, consumer prices, and jobs and inflation data which are all key indicators for the Bank of England when deciding interest rates.

Last week the Bank cut rates by 0.25% to 5.75%.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

08 Feb 01 | Business
UK interest rates cut
06 Feb 01 | Business
UK manufacturing output rises
08 Feb 01 | Business
Q&A: What interest rate cut means
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories