Today’s survey of UK purchasing managers also shows that companies continued to raise their prices sharply, despite an easing in their own costs.
Input cost inflation eased for the third month running in February, with manufacturers recording a particularly marked slowdown in price pressures, S&P Global says, adding:
The most commonly cited sources of cost inflation were higher wages, greater energy bills, and exchange rate depreciation against the US dollar. Meanwhile, lower purchase prices mostly reflected reduced fuel costs and falling shipping rates
But, February has brought another “steep increase” in average prices charged by private sector companies, with this rate of inflation only slightly lower than at the start of the year.
The PMI report says:
Lower prices charged inflation was led by the manufacturing sector. The latest rise in factory gate prices was the weakest since January 2021 and much softer than seen in the service economy.
Many service providers suggested that rising staff salaries had led to a sustained increase in their prices charged.
That may concern the Bank of England, which has warned that it could keep raising interest rates if price and wages increases remain high.