Data brings conflicting signals on inflation
House prices rose while the cost of goods leaving the factory fell last month, according to official figures yesterday that highlighted the interest rate dilemma facing the Bank of England.
The price of manufactured goods showed its first monthly fall since December last year, while the annual rate slowed to a two-year low. Output prices slipped 0.3 per cent last month, after a rise of 0.1 per cent in August, and were below expectations of a 0.1 per cent rise. The annual rate fell to 1.8 per cent, down from 2.7 per cent in August.
The cost of raw materials fell at their sharpest monthly rate in nearly two years, the Office of National Statistics said.
Analysts said the figures would go a long way in reassuring the Bank's Monetary Policy Committee that recent high oil and energy prices were not feeding through to general inflation.
The pound fell against the dollar and the euro as traders scaled back bets for an imminent rise in borrowing costs.
Meanwhile, government figures showed house price inflation hit a 17-month high in August. The Department for Communities and Local Government said prices rose 7.7 per cent year-on-year in August compared with 6 per cent in the previous month.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies