United Kingdom Producer Price Index (PPI) Output y/y

Output Producer Price Index (PPI) y/y reflects the change in the amount received by British manufacturers from selling goods in the domestic and foreign markets, in the given month compared to the same month of the previous year.

In addition to the production cost, which includes labor costs, raw materials, energy end enterprise maintenance, the selling price also includes the manufacturer markup, interest on loans, facilities and buildings maintenance and rental costs. All index numbers exclude VAT but include excise duty on cigarettes, manufactured tobacco, alcohol and petroleum products.

Products included in index calculation are divided into 10 main groups:

• Food
• Tobacco and alcohol
• Clothing, textiles and leather
• Paper and printing
• Petroleum products
• Chemicals and pharmaceuticals
• Metal, machinery and equipment
• Computer, electrical and optical products
• Transport equipment
• Other manufactured products

Goods from these categories are grouped into a basket. Output prices for the goods are collected from a monthly survey of manufacturers. The index is calculated on a weighted basis relative to the base period currently set to 2010. The benchmark level of 2010 is set to 100. Weights are adjusted every five years.

The output PPI reflects the output prices of goods and characterizes inflation from the manufacturer perspective. Thus, it is slightly ahead of consumer inflation data. The index growth is usually seen as positive for the British pound quotes.