2018 Economic Calendar
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United Kingdom : PPI  
Released On 7/18/2018 4:30:00 AM For Jun, 2018
PriorPrior RevisedConsensusActual
Output-M/M0.4 %0.5 %0.3 %0.1 %
Output-Y/Y2.9 %3.0 %3.2 %3.1 %
Input-M/M2.8 %3.3 %0.4 %0.2 %
Input-Y/Y9.2 %9.6 %10.1 %10.2 %

Producer prices continued to climb in June but by less than expected.

Factory gate prices were up just 0.1 percent on the month, albeit after a larger revised 0.5 percent increase in May. This put their yearly rate at 3.1 percent, only a tick higher than in mid-quarter but still the strongest reading since September 2017. Within the basket, most prices saw little monthly volatility bar petroleum and transport which posted gains of a 0.7 percent and 0.5 percent respectively. The core index rose 0.2 percent versus May which left its annual rate flat at 2.1 percent.

Meantime, input prices followed an upwardly revised 3.3 percent monthly spike in May with a modest 0.2 percent rise. Even so, this was enough to lift their yearly change from 9.6 percent to 10.2 percent, implying an additional squeeze of business profit margins.

Combined with the surprisingly soft June CPI (see today's calendar entry), the PPI update provides further reason for supposing that the UK inflation backdrop might not be deteriorating as quickly as the BoE anticipated. A monetary tightening next month clearly remains a possibility but arguing the case has certainly got rather harder.

The Producer Price Index (PPI) measures the prices of goods bought and sold by manufacturers. The input price index measure the prices of materials and fuels purchased by manufacturers for processing. These are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day running. The output price index captures prices charged by manufacturers as they pass through the factory gate and excludes any VAT or similar deductible tax. Both measures may be seen as leading indicators of consumer price index (CPI) inflation although the short-term correlation is only very weak.  Why Investors Care

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