2012.06.08 10:43:08 DATA SNAP: UK Manufacturers See Fall in Material Costs in May

By Ainsley Thomson and Nicholas Winning LONDON (Dow Jones)--U.K. manufacturers' raw material costs experienced their sharpest monthly fall in more than three years in May due to of a sharp decrease in the price of crude oil, official data showed Friday. The slowdown in the annual rates of both output and input price inflation may reassure rate-setters at the Bank of England that inflationary pressures in the domestic economy may be easing. The Office for National Statistics said the price manufacturers pay for materials and fuel, called input prices, fell 2.5% on the month in May--the largest monthly fall since December 2008. In comparison, input prices fell 1.4% on the month April. The annual rate of input price inflation slowed in May to 0.1%, the lowest annual rate since September 2009. In April, the annual rate of increase for input prices was 1.0%. Economists polled by Dow Jones Newswires had forecast input prices to fall 1.6% on the month earlier, and rise 1% on the year earlier. The main driver of the sharp monthly drop in input prices was a 7.7% fall in the cost of crude oil prices--the largest monthly fall since December 2008. The ONS said prices charged by U.K. companies at the factory gate, called output prices, fell 0.2% on the month in May, compared with a rise of 0.6% in April. Factory gate prices were 2.8% higher on the year earlier, compared with a rise of 3.2% in April. Economists were expecting a rise of 0.1% on the month and 3.2% on an annual basis. Write to Ainsley Thomson at ainsley.thomson@dowjones.com and Nicholas Winning at nick.winning@dowjoines.com (END) Dow Jones Newswires June 08, 2012 04:43 ET (08:43 GMT)