16-year high for factory inflation makes rates call 'a very careful balancing act'

From: The Scotsman | Date: January 15, 2008| Author: Scott Reid | Copyright information

PRICE pressures in the manufacturing sector are set to remain strong, reducing the scope for deep interest rate cuts, with new figures showing factory gate inflation hitting a 16-year high.

Soaring food and petrol costs helped drive prices up 0.5 per cent last month, taking the annual rate of factory gate inflation to 5 per cent - its highest since summer 1991. Analysts had expected a more modest 4.6 per cent rate.

The new figures, from the Office for National Statistics (ONS),...

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