UK Producer Price Rises, Stocks Down

123jump.com Staff
14 Apr, 2008
New York City

The ONS reported that the output price index for domestic sales of manufactured products rose 6.2% in the year to March, compared with the rise of 5.9% in the year to February. The rising prices at producer level dragged stocks sharply lower. FTSE 100 index stocks fell 1.08% or 63.9 to 5,831.60. Whitbread led advancers in the FTSE 100 index shares with a rise of 2.4% followed by increases in SABMiller of 1.7% and in HBOS of 1.2%. Friends Provident and Carphone Warehouse led decliners.

[R]1:00PM New York, 5:00 PM London - U.K producer prices rise 6.2% in March on rising crude oil prices. UK consumers show a lack of confidence in their political leaders when it comes to dealing with credit crisis.[/R]

Stocks in London plummeted after investor sentiment was rattled by a government report showing rising oil and food prices nudged producer price inflation higher in March.

In London trading FTSE 100 stocks fell 1.08% or 63.9 to 5,831.60.

Of the FTSE 100 index stocks 15 gained, 82 declined and 5 were unchanged. Whitbread led advancers in the index shares with a rise of 2.4%, followed by SABMiller increasing 1.7%.

U.K. producer prices rise 6.2% in March

The Office of National Statistics reported today on its Web site that the output price index for home sales of manufactured products rose 6.2% in the year to March, compared with the rise of 5.9% in the year to February.

However unadjusted, the index rose 0.9% from February in March due to rising petroleum product prices.

The statistics office also noted that the output price index, excluding excise duties, gained 6.2% in the year to March and rose 0.4% from February in March.

In addition, the output price index excluding food, beverages, tobacco and petroleum rose 3.1% in the year to March and in seasonally adjusted terms, the index rose by 0.3% from February in March.

According to the ONS, the input price index for materials and fuels purchased by manufacturing industry jumped 20.6% in the year to March and rose 2.9% in February from March on rising crude oil prices.

On the overall, prices of imported materials as a whole gained 3.3% from February in March, while in seasonally adjusted terms the input price index advanced 1.8 % from February in March, with the input price index for manufacturing industry excluding the food, beverages, tobacco and petroleum industries increased 9.7% in the year to March.

British relaxed about credit crisis

The Financial Times reported today that the FT/Harris poll showed that the Britons are least concerned the international credit crisis as they believe it has not had a significant effect on their daily lives.

Also people in the U.K have very little faith that the Treasury and the Bank of England will make wise choices if the credit crisis worsens the situation markedly.

According to the poll, the British appear more concerned about their own policymakers than are the Germans, Americans, Spanish, French or Italians, but they would not like a change.

In Britain, 40% of households cited “rising prices for food and energy” as the biggest problem, well above all other categories.

Gainers & Losers

Whitbread Plc led advancers in the FTSE 100 index shares with a rise of 2.42% followed by increases in SABMiller Plc of 1.69%, in HBOS Plc of 1.18%, in Tesco Plc of 0.84%, and Diageo Plc of 0.67%.

Friends Provident led decliners in the FTSE 100 index shares with a drop of 10.80% followed by losses in Carphone Warehouse of 3.79%, in London Stock Exchange of 3.62%, in British Airways Plc of 3.58%, and Home Retail Group of 3.58%.

Friends Provident declined after the U.S. private equity fund JC Flower said that it will not raise its offer for the company.

Commodity stocks fell as well after the OPEC said on Saturday that oil markets were “fundamentally well supplied”. Also the International Energy Agency corroborated OPEC’s view and cut forecasts for oil demand in 2008 by 310,000 barrels a day.

Oil prices also fell below $110 a barrel.

In the precious metals trading, gold fell 0.3% to $921.40 an ounce, and silver slipped 1.1% to $17.53 an ounce.

Xstrata fell 3.24%, Anglo America Plc slumped 3.07% and BHP and Antofagasta declined 2.7%.