UK Producer Inflation Lowest in 7 Months

Factory gate prices for UK-manufactured goods rose 2.5% year-on-year in January 2026, easing from a downwardly revised 3.1% increase in December. This marked the lowest reading since late June, driven by weaker energy-related price pressures. Prices for coke and refined petroleum products fell 8.4% annually, deepening from a 1.7% decline in December and providing the largest downward contribution to the overall rate. Meanwhile, although inflation slowed for food products (3.4% vs 4.1%), partly driven by processed and preserved meat, and for motor vehicles and other transport equipment (5.5% vs 6.4%), both remained the largest upward contributors to factory gate inflation. Inflation also rose for alcoholic beverages and tobacco (1.6% vs 0.8%), basic metals and machinery (3.6% vs 3.5%), and computer, electronic, and electrical products (1.6% vs 1.2%). On a monthly basis, producer output prices were unchanged, following a 0.1% fall in December.

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.