UK Producer Inflation at 4-Month Low of 3.1%

Factory gate prices for UK-manufactured goods advanced 3.1% year-on-year in July 2026, slowing from a 3.5% increase in June, below expectations of 3.2% and marking the softest increase in four months. Eight of the 10 product groups made upward contributions to the annual rate, led by a jump in prices of coke and refined petroleum products (30.1% vs 41.3% in June) amid higher energy costs. Price growth accelerated for other manufactured products (4.6% vs 4.5% in June), while it slowed for basic metals, fabricated metal products, and machinery (5.0% vs 5.2%). Meanwhile, motor vehicles and other transport equipment made the largest downward contribution, with prices declining 1.6%, followed by food products, where prices fell 0.8%. On a monthly basis, factory gate prices rose 0.2%, after a revised 0.1% drop in June and matching market forecasts.

Factory gate prices for UK-manufactured goods increased 3.5% year-on-year in June 2026, easing from a downwardly revised 3.7% growth in May, marking the softest increase in three months. Eight of the 10 product groups made upward contributions to the annual rate, led by a surge in prices of coke and refined petroleum products (43.0% vs 53.1% in May) amid higher energy costs. Inflation accelerated for other manufactured products (4.2% vs 3.9% in May) and basic metals, fabricated metal products, and machinery (4.9% vs 4.2%). Meanwhile, motor vehicles and other transport equipment made the largest downward contribution, with prices falling 1.9%, followed by food products, where prices declined 0.7%. On a monthly basis, factory gate prices were unchanged, following a downwardly revised 0.3% rise in May and falling short of market forecasts for a 0.4% increase.

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.