UK factory costs have surged at their fastest rate since the aftermath of the Black Wednesday, as rising energy prices linked to the Middle East conflict ripple through the economy and threaten to reignite inflation.
Fresh data from S&P Global shows that production costs in British manufacturing accelerated sharply in March, while overall private sector growth slowed to what economists described as “a crawl”.
The figures, drawn from the closely watched Purchasing Managers’ Index (PMI), point to a rapid deterioration in business conditions, driven by soaring oil and gas prices, disrupted supply chains and weakening demand.
The spike in costs has been directly linked to the surge in global energy prices following the escalation of conflict in the Middle East. The effective closure of key shipping routes such as the Strait of Hormuz has constrained supply, pushing up prices for fuel and raw materials used across manufacturing and food production.
The manufacturing input prices index jumped to 70.2 in March from 56 the previous month, its highest level since late 2022 and the steepest increase since October 1992, the month following Black Wednesday, when the pound’s collapse drove up the cost of imports.
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