UK output prices at a standstill

THE lack of inflationary pressure in Britain's manufacturing sector was highlighted by figures showing factory gate prices are at exactly the same level as a year ago

Government statisticians revealed that output prices were steady in June and unchanged from 12 months earlier. Further up the inflation pipeline, manufacturers' raw material costs plunged by 0.9% during the month to stand 7.2% lower than a year ago. The fall was driven by a sharp drop in oil prices.

John Butler at HSBC said: 'This set of numbers tells us inflationary pressures from the manufacturing sector remain non-existent, but margins have stabilised.'

Meanwhile, a CBI report showed the financial services sector enjoyed an unexpected pick-up in business in the second quarter, with volumes growing at the fastest rate for two and a half years. Volumes are expected to increase further, but at a more moderate rate.