mpc.theyserveforyou.com

mpc: 8

V

Prices

A40 The Bank oil-inclusive commodity price index had fallen by 0.6% in January, taking the annual inflation rate from 21.4% down to 18.4%. The monthly fall had reflected price falls in allthe major components of the index, except for metals. In particular, the price of domestic foodhad fallen quite sharply, suggesting that domestic food prices had not yet reached their trough.Excluding oil, commodity prices had fallen by 1.0% in January to give an annual inflation rate of1.2%. A41 Manufacturing input prices had fallen by 1.0% in January, taking the annual inflation rate from 12.2% to 10.4%. This had mainly reflected falls in the prices of domestic food and ofimported materials. January's fall may have been only a temporary pause in the recent upwardtrend in input prices, however, as oil prices had risen sharply again in February. According toFebruary's CIPS manufacturing survey, the input price index had risen to its highest level sinceAugust 1995. Total output prices excluding excise duties (PPIY) had remained unchanged inJanuary, to give an annual inflation rate of 1.8%, slightly up from 1.6% in the previous month.February's CBI survey output price balance had also remained unchanged at -4, with respondentshaving continued to report expectations of falling prices. A42 Imported goods price inflation had been broadly unchanged at -0.4% in December, despite a further rise in the contribution from fuels prices to 1.9 percentage points. The contribution frommanufactured goods prices had fallen further to -1.8 percentage points from -1.4 percentagepoints. Total goods export price inflation had risen to 2.6% in December, with a larger positivecontribution from fuels prices. A43 RPIX inflation had fallen to 2.1% in January, down from 2.2% in each of the previous three months. HICP inflation had fallen to 0.8% in January, the lowest since the series began inJanuary 1996 and also the lowest in the EU. The difference between HICP and RPIX inflationhad widened to 1.3% in January from 1.0% in the previous month. Around 40% of this change inthe wedge had been accounted for by higher housing depreciation which is not included in theHICP measure. A44 The gap between RPIX services and RPIX goods price inflation had widened to its highest level since November 1991. RPIX service price inflation had risen to 4.2% in January. Thelargest positive contributions had come from leisure (0.3 percentage points) and vehicleinsurance. RPIX goods price inflation had fallen to 0.0%, the lowest on record. The largestpositive contributions to RPIX goods price inflation had come from petrol (0.7 percentage points)