Factory gate prices of goods produced by the UK manufacturers increased 2.1 percent year-on-year in January 2019, easing from a downwardly revised 2.4 percent rise in December and below market expectations of 2.2 percent. It is the lowest producer inflation since October 2016, as cost slowed for chemicals & chemical products (6.7 percent vs 7.1 percent in December); rubber & plastic products (2.1 percent vs 2.8 percent); wood & products of wood and cork (6.2 percent vs 7.4 percent) and basic metals (0.8 percent vs 2.5 percent). In addition, prices fell for petroleum products (-0.4 percent vs 3.7 percent), namely crude oil (-6.9%). Prices for materials and fuels paid by the UK manufacturers for processing (input prices) rose at a slower 2.9 percent, down from a downwardly revised 3.2 percent gain in December and marking the slowest increase since June 2016. On a monthly basis, output prices showed no growth, after a 0.3 percent fall in December and in line with forecasts. Producer Prices Change in the United Kingdom averaged 5.06 percent from 1964 until 2019, reaching an all time high of 27.80 percent in January of 1975 and a record low of -1.90 percent in August of 2015.
Producer Prices Change in the United Kingdom is expected to be 1.70 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Producer Prices Change in the United Kingdom to stand at 2.00 in 12 months time. In the long-term, the United Kingdom Producer Prices Change is projected to trend around 2.50 percent in 2020, according to our econometric models.