Output Core Producer Price Index (PPI) y/y reflects the change in the amount received by British manufacturers from selling goods in the domestic and foreign markets, in the given month compared to the same month of the previous year.
In addition to the production cost, which includes labor costs, raw materials, energy end enterprise maintenance, the selling price also includes the manufacturer markup, interest on loans, facilities and buildings maintenance and rental costs. All index numbers exclude VAT but include excise duty on cigarettes, manufactured tobacco, alcohol and petroleum products.
Food, alcohol, tobacco and petroleum product prices are excluded from the indicator calculation due to their high volatility. Other goods are divided into the main groups:
Goods from these categories are grouped into a basket. Output prices for the goods are collected from a monthly survey of manufacturers. The index is calculated on a weighted basis relative to the base period currently set to 2010. The benchmark level of 2010 is set to 100. Weights are adjusted every five years.
The output PPI reflects the output prices of goods and characterizes inflation from the manufacturer perspective. Thus, it is slightly ahead of consumer inflation data. The index growth is usually seen as positive for the British pound quotes.
The chart of the entire available history of the "United Kingdom Core Producer Price Index (PPI) Output y/y" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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