Annual producer price inflation rates continue to slow

In the year to April, producer input prices decreased from 7.3% to 3.9% – and while it has been positive for now 29 consecutive months, it’s been slowing for the last 10, meaning the annual rate is now 20.5 percentage points below its record annual high of 24.4% in June 2022.  

Producer output prices, meanwhile, hit 5.4% in April – down from 8.5% in March meaning, while the annual output rate has been positive for 28 consecutive months, it is down 14.3 percentage points from its recent peak of 19.7% in July 2022.  

According to the Office of National Statistics, both input and output prices have been broadly stable since June 2022 after a period of rapid growth starting in 2021 and continuing into early 2022. This levelling out, when compared with the rapid increases seen last year, has the effect of creating a fall in the annual inflation rate.  

Looking at the annual input inflation rate, the largest upward factor was on “other parts and equipment”, which contributed 2.15 percentage points – with this product group seeing an increase in the year to April 2023 of 6.6%, down 1.9 percentage points from March. This was mainly driven by domestic inputs of air, spacecraft and related machinery.  

The second-largest contributor to input inflation came from domestic food – contributing 1.17 percentage points, with the product group seeing a 9.4% increase in the year to April 2023, down from 15.3% in March. The main driver of this was processed and preserved meat for the domestic market.