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The ONS published separate data alongside the inflation showing factory gate inflation was higher than expected in June.
9.40am: British factory gate inflation slowed to its lowest rate in two-and-a-half years in May.
Factory gate inflation picked up by more than expected last month to its fastest pace in nearly a year, driven by rising energy prices, official data showed today.
Factory gate inflation rose by an annual 2%, the smallest increase since July, helped by the biggest annual fall in crude oil input costs since then.
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A year ago, only a handful of rich countries had factory-gate inflation of more than 4%.
Two trends undermined their usefulness: the steady decline in manufactured goods as a share of spending, and increasing efficiency in retailing, which meant that factory-gate inflation did not always show up in the shops.
Halfway through the year, he began to raise interest rates, hoping to brake the economy before it reached inflation's gate.
(d) Grade inflation.
"For several months we've been observing more inflation at the factory gate, higher commodities inflation and the risk of higher pay settlements," he said.
Howard Archer, chief economist at IHS Global Insight, said the decline in factory gate prices fuelled hopes that consumer inflation "will head down appreciably over the coming months", easing the squeeze on consumers.
Kemp-Roth thundered out of the gate, picking up sponsors and votes as inflation went from a high 8% per year to a nosebleed 14%.
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