UK Producer Inflation Slows to 3.4%

Factory gate prices for UK-manufactured goods rose 3.4% year-on-year in December 2025, unchanged from the previous month. All ten product groups contributed upward pressure to the annual rate, with the largest contribution coming from food products, where prices increased by 4.3%, slightly accelerating from a 4.2% rise in November, partly driven by higher prices for processed and preserved meat. Inflation also picked up for textiles (4.9% vs 4.8%) and rebounded for paper and paper products (0.2% vs -0.2%) as well as coke and refined petroleum products (0.1% vs -0.6%). Meanwhile, price growth for motor vehicles and other transport equipment eased to 6.3% from 7.2%, exerting downward pressure on the annual rate. Costs also rose at a slower pace for basic metals (3.6% vs 4.0%) and chemical and pharmaceutical products (1.8% vs 2.1%). On a monthly basis, producer output prices were unchanged, compared with November and market expectations of a 0.1% gain.

Factory gate prices for UK-manufactured goods rose 3.4% year-on-year in November 2025, easing from an over two-year high of 3.6% in October. The main downward pressure came from coke and refined petroleum products, where prices fell 0.6% year-on-year in November, unchanged from October. Meanwhile, seven out of ten product groups made upward contributions to the annual inflation rate, led by food products as well as motor vehicles and other transport equipment. Prices for food products rose 4.2%, slowing from a 4.6% increase in October, partly driven by higher prices for processed and preserved meat, which also accounted for the largest contribution to the change in the annual inflation rate. Costs for motor vehicles and other transport equipment climbed 7.2%, accelerating from a 6.6% rise in the previous period. On a monthly basis, producer output prices increased 0.1%, matching the revised figure for October, and in line with expectations.

Factory gate prices for UK-manufactured goods rose 3.6% year-on-year in October 2025, following an upwardly revised 3.5% gain in September, marking the largest increase since May 2023. Out of the ten product groups, nine made upward contributions to annual output inflation, led by food products, motor vehicles, and other transport equipment. Prices for food products increased 4.6%, unchanged from September, while motor vehicles and transport equipment rose 6.6%, edging up from 6.5% previously. Inflation also picked up for basic metals, fabricated metal products, and machinery, rising 4.1% after a 3.5% gain in September. Meanwhile, the only downward contribution came from coke and refined petroleum products, where prices fell 1.4%, easing from the 2.6% decline in the prior period. On a monthly basis, producer output prices were unchanged, at the same pace as in September, as expected.