UK Producer Inflation Beats Forecasts

Factory gate prices for UK-manufactured goods advanced 4.0% year-on-year in May 2026, in line with market expectations but slightly easing from an upwardly revised 4.1% rise in April, which was the highest reading since May 2023. Almost all 10 product groups made upward contributions to the annual rate, led by a surge in prices of coke and refined petroleum products (55.6% vs 51.1% in April) amid higher energy costs. Inflation also accelerated for other outputs from manufacturing (4.3% vs 3.1% in April) and basic metals, fabricated metal products and machinery (4.2% vs 4.1%). Meanwhile, motor vehicles and other transport equipment provided the largest downward contribution, with prices falling 1.7% (vs 2.2% in April). The decline was due to supply chain issues and other market factors. Monthly, factory gate prices rose 0.5%, slowing from an upwardly revised 1.5% increase in April, matching market forecasts and marking the softest increase since February, when producer prices fell.

Factory gate prices for UK-manufactured goods increased 4.0% year-on-year in April 2026, more than market expectations of a 2.8% rise and accelerating from an upwardly revised 3.0% growth in March. This marked the highest reading since May 2023, as all 10 product groups made upward contributions to the annual rate, led by a surge in prices of coke and refined petroleum products (52.6% vs 23.7% in March) amid higher energy costs. Inflation also picked up for other manufacturing outputs (2.7% vs 2.6%) while remained steady for basic metals, fabricated metal products, and machinery (at 3.7%). Meanwhile, price growth slowed mainly for food products (0.5% vs 1.7%) and motor vehicles and other transport equipment (2.1% vs 2.4%). On a monthly basis, factory gate prices rose 1.4%, matching the pace recorded in March and topping market forecasts of a 1.0% increase.

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.