Factory gate prices of goods produced by the UK manufacturers increased 2.5 percent year-on-year in December of 2018, easing from a downwardly revised 3.0 percent rise in the prior month and below market expectations of a 2.9 percent gain. It is the softest producer inflation since April, as prices slowed for petroleum products (5.1% vs 10.9% in November), namely fuels (8.3% vs 9.4%); chemicals & chemical products (7.8% vs 8.1%); tobacco products, including duty (7.3% vs 9.9%) and food products (0.6% vs 1.2%). Also, prices for materials and fuels paid by the UK manufacturers for processing (input prices) rose at a slower 3.7 percent, down sharply from a downwardly revised 5.3 percent gain in November and marking the slowest increase since June 2016. On a monthly basis, output prices dropped 0.3 percent, after a downwardly revised 0.1 percent increase in November and against market expectations of a 0.1 percent rise. Producer Prices Change in the United Kingdom averaged 5.06 percent from 1964 until 2018, reaching an all time high of 27.80 percent in January of 1975 and a record low of -1.90 percent in August of 2015.
Producer Prices Change in the United Kingdom is expected to be 1.70 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Producer Prices Change in the United Kingdom to stand at 2.00 in 12 months time. In the long-term, the United Kingdom Producer Prices Change is projected to trend around 2.50 percent in 2020, according to our econometric models.