The UK economy has been dealt another blow as official data showed a rise in “factory gate” inflation, to a 16 year high. The Office for National Statistics reported that the price of goods leaving the factory gate, rose by 1% in January, pushing the annual rate up from 5% to 5.7%.
The figure is at its highest since 1991, and is mainly put down to the rise in crude oil and the cost of ingredients of home produced food. Raw materials and energy rose 18.9% on the year.
The figures will not be good news for homeowners and business alike, with Global Insight economist Howard Archer suggesting the news would cause “Severe headaches at the Bank of England”, amid fears that the interest rate will not come down as fast as many had hoped.
A recent survey of UK business owners showed that confidence in the economy is at its lowest since 2003, with many companies expecting to make redundancies during the next few months. While the majority are expecting a slowdown, however, few are predicting a full blown recession in the UK.
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