LONDON (Thomson Financial) - The pound strengthened against other currencies after the UK producer prices data soared in January, suggesting pipeline inflationary pressures are very much alive in the economy.
Output prices rose a monthly 1.0 pct after a 0.4 pct increase in December, the highest monthly rise since January 1995 and well above analyst expectations for another 0.4 pct increase.
Input prices rose by 2.6 pct in January from December, far above analyst expectations for a 1.3 pct rise.
The annual rate for input prices was the highest for 22 years.
The data reinforces the view that the Bank of England will not be able to cut interest rates aggressively this year because of inflation risks.
The pound rose to 1.9480 usd from 1.9430 usd before the news, and also gained ground on the euro, pushing it to 0.7475 stg from 0.7495 stg.
carlo.piovano@thomson.com
cp/cp/ra
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