The annual inflation rate of the input Producer Price Index (PPI) in the UK was negative for the third consecutive month. However, there is a month-on-month rise in the rate for the first time since reaching its record high in June 2022. The annual inflation rate of the output PPI was negative for the second consecutive month, although this too has seen a month-on-month rise in the rate for the first time since July 2022. The index levels for both input and output prices have remained high since July 2022. The small decreases seen in the past few months, when compared with the broadly stable values over the past year, have created a fall in the annual inflation rate, even though the index levels remain high, according to the Office for National Statistics.
Input producer price inflation
The annual inflation rate of producer input prices increased by 0.9 percentage points from negative 3.2% in July 2023 to negative 2.3% in August 2023. The monthly producer input inflation increased by 0.4% in August 2023, following a fall of 0.4% in July 2023. The last time the monthly rate was positive was in March 2023. The figures for both July and August 2023 are provisional; therefore, they may be subject to small revisions as additional survey data are returned and validated.
Output producer price inflation
The annual inflation rate of producer output (factory gate) prices increased by 0.3 percentage points from a fall of 0.7% in July 2023 to a fall of 0.4% in August. This was the second consecutive month that the rate has been negative, but the first month-on-month rise in the annual rate since July 2022. Producer output inflation increased by 0.2% between July and August 2023, unchanged from the inflation rate between June and July 2023.
