UK factory prices, inflation in limbo

Figures from the Office for National Statistics today showed that factory prices remained virtually unchanged in July compared with June, indicating that manufacturing companies are facing an ongoing squeeze on earnings as the economic cycle refuses to show clear signs of turning around. Falls in petroleum product prices in particular helped keep inflation in check, leaving the way open for the Bank of England to retain its current low interest rates. Even excluding petroleum products, food, beverages and tobacco, the factory output price index rose just 0.5% in the year to Ju...