Insights on Producer Price Trends in the United Kingdom for 2024

Impact of Inflation on Producer Prices in the United Kingdom

The latest data from the Office for National Statistics shows that producer input prices in the United Kingdom fell by 0.4 % in the year to June 2024 , following a fall of 0.7 % in May . Monthly input prices also saw a decrease of 0.8 % in June 2024 , compared to a 0.6 % fall in May . On the other hand , producer output prices experienced a 1.4 % rise in the year to June , lower than the 1.7 % increase in May . Monthly output prices declined by 0.3 % in June , following a rate of 0.0 % in May.

The decline in output prices was mainly driven by chemicals and paper products , with negative percentages of 3.1 % and 1.7 % , respectively . Input producer price inflation was impacted by various product groups , with 4 contributing negatively to the annual inflation rate in June 2024 . The biggest downward contributions came from fuels , other parts and equipment , and chemicals , with percentages of negative 0.74 , 0.50 , and 0.35 , respectively.

In contrast , the largest upward contribution came from inputs of domestic food , at 0.36 percentage points . This increase was due to annual food input prices rising from 0.8 % in May to 1.5 % in June . Metals and non - metallic minerals also played a significant role in the change in the annual inflation rate , contributing 0.39 percentage points . Additionally , the prices of materials and fuels imported by UK manufacturers fell by 0.2 % in the year to June 2024 , following a revised fall of 1.3 % in May.

Overall , services producer prices rose by 3.1 % in the year to Q2 2024 , down from an increase of 3.7 % in Q1 . Fuel prices experienced a significant decrease of 14.5 % in the year to June 2024 , mainly due to lower electricity prices . The annual inflation rate for metals and non - metallic minerals also saw a positive trend , reaching 0.0 % in June , up from negative 1.8 % in May.

In conclusion , while some sectors in the United Kingdom experienced declines in producer prices , others showed signs of improvement . The fluctuation in input producer price inflation highlights the complexities of the market , with various product groups influencing the overall inflation rate . It will be essential to monitor these trends closely to understand the long - term implications on the economy.