Producer price growth at record

UK producer prices rose at a record pace in May, official figures show, reported The BBC.

The Office for National Statistics said that output prices for sales of manufactured products rose at a rate of 8.9% in the year to April.

Input prices also shot higher, up 27.6% over the year. The rate of growth in input and output prices is the quickest since records began in 1986.

The rising cost of food, scrap metal and energy are pushing up the inflation rate even as the UK economy slows.

The data was much worse than many analysts had been expecting.

Jonathan Loynes, economist at Capital Economics, called the numbers "absolutely horrendous".

He said: "The increases are now so large that at least some portion of them looks likely to work its way into the High Street, even if retail sales slump."

He added that the producer prices report was "the clearest signs yet that the inflation problem is starting to spread beyond the food and energy sectors".