UK Producer Inflation Picks Up to 2.6%

Factory gate prices for UK-manufactured goods climbed 2.6% year-on-year in March 2026, accelerating from 1.8% in February and marking the highest reading in three months. Of the 10 categories, nine contributed positively to the annual rate, led by a strong rebound in coke and refined petroleum products (14.6% vs -7.9% in February), amid surging global energy costs. Inflation also picked up for motor vehicles and other transport equipment (2.1% vs 1.8%), while price growth for other manufacturing outputs eased slightly to 2.7% (vs 2.8%), though it remained a key contributor to upward pressures. Meanwhile, inflation eased for food products (1.6% vs 2.4%), chemicals and pharmaceutical preparations (0.1% vs 0.9%), and basic metals (3.5% vs 3.7%). On a monthly basis, factory gate prices rose 0.9%, rebounding from a 0.5% fall in February, below expectations of a 1% gain but marking the sharpest rise since October 2022.

Factory gate prices for UK-manufactured goods rose 1.7% year-on-year in February 2026, easing from a 2.5% increase in January and defying expectations of a slight pickup to 2.6%. This marked the softest reading since April last year, with the main downward pressure coming from coke and refined petroleum products, where prices fell 8.6%, deepening from a 7.7% decline and providing the largest drag on the overall rate. Producer inflation also moderated for motor vehicles and transport equipment, with annual price growth slowing sharply to 1.8% from 5.5%. Meanwhile, producer inflation eased for food products (2.4% vs 3.2%) and other manufacturing outputs (2.7% vs 2.9%), though both remained key upward contributors, with food prices partly driven by higher beef costs amid supply and demand pressures. On a monthly basis, producer output prices fell 0.5%, after being unchanged in January and defying forecasts of a 0.2% rise.

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.