Producer Price Inflation UK March 2023 Including Services January To March 2023

19th April 2023

Producer input prices rose by 7.6% in the year to March 2023, down from 12.8% in the year to February 2023.

Producer output (factory gate) prices rose by 8.7% in the year to March 2023, down from 11.9% in the year to February 2023.

Inputs of crude oil and petroleum products provided the largest downward contributions to the change in the annual rates of input and output inflation, respectively.

While annual inflation rates have been falling in recent months, the index levels for both input and output prices have been broadly stable since June 2022.

On a monthly basis, producer input prices increased by 0.2% and output prices increased by 0.1% in March 2023.

Services producer prices rose by 4.9% in the year to Quarter 1 (Jan to Mar) 2023, down from 5.3% in the year to Quarter 4 (Oct to Dec) 2022.

Producer price inflation rates
The annual rate of the input Producer Price Index (PPI) has now been positive for 28 consecutive months, although it has been slowing for the last nine months. The annual rate is now 16.9 percentage points below its record annual high of 24.5% in June 2022 (Figure 1).

The annual rate of the output PPI has now been positive for 27 consecutive months, but it has been slowing for the last eight months. It is down 11.0 percentage points from its recent peak of 19.7% in July 2022.

The index levels for both input and output prices have been broadly stable since June 2022 after a period of rapid increase starting in 2021 and continuing into early 2022 (Figure 2). This levelling out, when compared with the rapid increases seen last year, has the effect of creating a fall in the annual inflation rate (Figure 1), as explained in our Beware base effects article.

Output producer price inflation
The annual rate of producer output (factory gate) prices decreased by 3.2 percentage points from 11.9% in February 2023 to 8.7% in March 2023.

The monthly producer output inflation increased by 0.1% in March 2023, following a 0.4% decrease in February 2023. However, this was notably lower than the monthly rate of 3.1% seen in March 2022 caused by the conflict in Ukraine affecting petrol prices (Table 4).

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