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Economy in Brief

UK Prices Pressures Mount for Industry 
by Robert Brusca June 18, 2008

UK orders snapped back to a thin +1 reading for June after -10 net balance reading in May and a deeper decline for April. But the story is that price pressures continue to rage at intense levels at a +28 reading for the July-Sep period barely down from +30 for June-Aug despite some substantial order weakness in earlier months. Export orders made some recovery in June but still posted a net balance reading of -5 up from -12 in May. Stock building was halved from a new reading of +16 to +8 in June.

After having embarked on path of rate cuts, the BOE is having real second thoughts. In its last meeting it was just revealed that the BOE actually considered a rate hike. That news shook sterling markets on the day. With the CIPS report we can see why the BOE is thinking of changing course. Firms are planning price increases on a broad scale and the BOE is currently not happy with the prevailing over-the-target inflation performance it has helped to engineer. With the revelation that the BOE considered a rate hike (but held back) it joins the ranks of other central banks, notably the ECB and the Fed, that are planning to hike rates or warning of the possibility of hiking.

UK Industrial volume data CBI Survey
Reported: Jul
08
Jun
08
May
08
Apr
08
12MO Avg Pcntle Max Min Range
Total Orders #N/A 1 -10 -13 1 84% 9 -40 49
Export Orders #N/A -5 -12 -12 -5 83% 3 -43 46
Stocks: Final Goods #N/A 8 16 12 11 36% 26 -2 28
Looking ahead
Output Volume: Next 3M 11 2 0 0 8 54% 28 -28 56
Avg Prices 4 Next 3M 28 30 25 25 21 100% 30 -29 59
From end 2000
Compare to CIPS MFG
  May
08
Apr
08
Mar
08
Feb
08
12MO Avg Pcntle Max Min Range
UK MFG 50.03 50.81 51.14 51.19 52.76 42% 56.32 45.46 11
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