Due to a drop in cost of raw materials, such as oil and metal, factory output prices fell in August at their fastest monthly rate since records began in 1986. The Office for National Statistics said factory output prices were 0.6% lower in August than in July after a 2% fall in the cost of raw materials and fuel. Connected with the 11% decline in oil prices from July through August, the manufacturing processes have become more economical due to the transportation cost also declining. Most home produce aliments declined but price of food products rose at its fastest pace since 1986, a 12.5% rise in the year to August. The Bank of England’s concern for rising inflation has raised a concern for interest rates and has not been able to cut interest rates. Even though England’s Monetary Policy Committee kept interest rates at 5% the bank’s approach is not defined. Experts say banks should be more aware of a decrease in demand rather than the rising inflation. As we have seen in previous articles, this one demonstrates how many other sectors of production are keyed off by the price of oil.
See the article here. -S
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