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UK June PPI slows sharply, May trade gap widens unexpectedly

Published 07/09/2010, 04:34 AM
Updated 07/09/2010, 04:36 AM

LONDON, July 9 (Reuters) - British factory gate inflation slowed more than expected to a three-month low in June but Britain's trade gap for goods and services unexpectedly hit its widest since July 2008, official data showed on Friday.

The Office for National Statistics said producer output price inflation slowed to 5.1 percent in June from May's downwardly revised 5.5 percent after an unexpected month-on-month price fall of 0.3 percent. The annual rate was well below forecasts for a reading of 5.7 percent.

Input prices fell for a second consecutive month, bringing the annual rate down to 10.7 percent from 11.5 percent in May.

At the same time, the ONS released data which showed Britain's goods trade deficit with the rest of the world widened to 8.062 billion pounds in May from 7.411 billion in April.

Economists had forecast a deficit of 7.0 billion pounds.

Taking trade in services into account, the total deficit swelled to 3.817 billion pounds, its highest since July 2008 from 3.502 billion.

The goods trade gap with non-EU countries also widened unexpectedly to 4.487 billion pounds. Analysts had forecast a deficit of 3.8 billion pounds.

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