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"October's producer prices figures are likely to mark the start of a major downward trend in input price inflation"
- Samuel Tombs, an economist at Capital Economics
U.K. producer prices declined to the lowest level in five months in October, the Office for National Statistics announced on Friday. Producer inflation eased on lower row material costs and faltering global demand.
"October's producer prices figures are likely to mark the start of a major downward trend in input price inflation and also underline the competitive pressures bearing down on manufacturers' pricing power," said Samuel Tombs, an economist at Capital Economics.
"Lags between producer and consumer price inflation are quite long, so lower producer price index figures will not ease the pressure on households' spending power just yet. Nonetheless, today's figures strengthen the MPC's argument that consumer price inflation will fall back to below the 2% inflation target in time," added Mr. Tombs.