UK faced more producer inflation than thought, corrected official data shows
MANCHESTER, England (Reuters) -Britain suffered higher rates of industrial producer price inflation than previously assumed, according to new indicative figures from the Office for National Statistics that aim to correct problems with the data.
The ONS is in the process of fixing problems with a wide range of economic data including unemployment figures as well as the producer prices figures. Last month an official review called for a major restructuring of the organisation's management.
Producer price data measure how input costs and selling prices of manufacturing and services companies change. The figures are used in gross domestic product data to adjust for different rates of inflation in different industries, and in some trade data too.
The ONS suspended the publication of producer price data in March after finding an error in how 'chain-linking' methods had been coded into its data production systems and said on Thursday that it expected to resume normal publication in October.
Thursday's figures represent work so far in correcting the data and show big upward revisions for annual input and output inflation rates for factories in 2023. They were pushed higher by average of 1.0 and 1.1 percentage points, respectively.
Whereas the uncorrected data suggested that Britain flirted with deflation for factory output prices in the second half of 2023, the new series show prices rising at an annual rate of around 1%.
The most recent previously published annual rate of producer output price inflation, for January 2025, was revised up to 0.6% from 0.3% and the ONS estimated that April's reading on the corrected methodology was 0.5%.
"Further corrections are mostly expected to be small in magnitude," the ONS said.
Annual factory input and output inflation rates peaked in 2022 at slightly higher levels than previously thought when Britain was hit by an energy price shock caused by Russia's full-scale invasion of Ukraine.
Revisions to producer input price inflation showed a similar pattern to those for output price inflation.
The new data show annual input price inflation stood at 0.6% in January 2025, compared with a previous estimate of -0.1%. April 2025 figures showed a 1.1% annual fall in manufacturers' input costs.
The new series for the services sector producer prices showed a more nuanced picture. The ONS had overestimated services output price inflation during 2022, but underestimated it through 2023 and some of 2024.
(Graphics by Andy Bruce; editing by David Milliken)
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