{"id":3148,"date":"2011-01-20T17:32:55","date_gmt":"2011-01-20T17:32:55","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3148"},"modified":"2025-03-27T15:49:11","modified_gmt":"2025-03-27T15:49:11","slug":"uk-manufacturing-price-raising-plans-inconsistent-with-inflation-target","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3148","title":{"rendered":"UK manufacturing price-raising plans inconsistent with inflation target"},"content":{"rendered":"<p>The January CBI quarterly industrial trends survey provides further evidence that the MPC is losing control of inflationary expectations. A net 33% of firms reported plans to raise prices (after seasonal adjustment) &ndash; the highest, except for one month in 2008, since 1984.<\/p>\n<p>The price-raising balance correlates with CPI goods inflation, suggesting that this will rise from an annual 3.5% in December to about 5% in early 2011, sufficient to add 0.8 percentage points to the headline CPI rate, given the 55% weight of goods in the basket &ndash; see chart.<\/p>\n<p>The CBI balance relates to pre-tax factory-gate prices so the latest surge cannot be attributed to the January VAT hike. Rather, it reflects pass-through of recent and expected cost increases, with firms apparently confident that the MPC will tolerate the implied inflation overshoot.<\/p>\n<p>Other notable features of the survey were a further strengthening of investment plans and a rise in capacity shortages, both consistent with the &#8220;output gap&#8221; in manufacturing being close to zero or even positive.\ufeff<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" style=\"width: 680px;\" src=\"\/storage\/ukg-cpi-cbi-is-20110120.gif?__SQUARESPACE_CACHEVERSION=1295545525342\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The January CBI quarterly industrial trends survey provides further evidence that the MPC is losing control of inflationary expectations. A net 33% of firms reported plans to raise prices (after seasonal adjustment) &ndash; the highest, except for one month in 2008, since 1984. The price-raising balance correlates with CPI goods inflation, suggesting that this will [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3148","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3148","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3148"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3148\/revisions"}],"predecessor-version":[{"id":5457,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3148\/revisions\/5457"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}