U.K. PRODUCER PRICES SEEN MOVED BY TECHNICALITIES
U.K. Producer price data for March were
roughly as expected after taking into account technical factors
which affected the year-on-year outcome, economic analysts
said.
    The figures showed a 0.3 pct provisional, non-seasonally
adjusted rise in output prices in March, unchanged from
February and close to the average for the last six months.
    The year-on-year rise was put at 3.7 pct, down from 4.2 pct
in February.
    But Chris Tinker, economist at brokerage house Phillips and
Drew, said the drop in the year-on-year rate mainly reflected a
rise in excise duties which affected the index in March last
year.
    He cautioned that it was dangerous to read too much into
the monthly figure, adding that a rise of only 0.2 pct in April
would take the year-on-year rise back above 4.2 pct.
    Analysts also noted that a drop in manufacturers' input
prices was almost entirely due to anticipated seasonal factors
such as a fall in industrial electricity costs.
    Duncan Squire of Lloyds Merchant Bank said the figures were
slightly disappointing in that the strengthening of sterling
had not yet reduced input prices as much as expected.
    Both he and Tinker said this factor should help keep input
costs down over the next few months, although Tinker added that
last year's fall in oil prices is now about to drop out of the
year-on-year comparisons and is likely to lead to a return to
rises in the index rather than falls.
 REUTER
