Factory-gate price growth reaches its highest rate since 2023
Prices charged by UK manufacturers rose more sharply in September, with factory-gate inflation reaching its highest annual rate since April 2023. The figures also show a steep rise in the cost of materials and fuels bought by manufacturers, while service-sector prices continued to climb at a faster annual pace than in the previous quarter.
Producer input prices were 8.3% higher than a year earlier, compared with a revised 6.7% annual increase in August. The Office for National Statistics (ONS) said this was the largest annual input-price rise since May 2026. On a monthly basis, input prices increased by 1.5% in September, after a revised 0.5% rise in August.
Output prices, often called factory-gate prices, rose 4.6% over the year to September, up from a revised 3.8% in August. That was the largest annual increase since April 2023. The monthly increase was 0.8%, following a 0.7% rise in August.
The two measures describe different stages of production. Input prices track materials and fuels purchased by UK manufacturers, including imported supplies and domestic purchases. Output prices measure what manufacturers receive for goods sold to the domestic market. They include more than the cost of raw materials, so the two rates should not be treated as identical measures of pressure or as proof that all higher costs are passed on to customers.
Oil-related products dominate the movements
Oil-related products were the main upward influences identified in the bulletin. Crude oil made the largest contribution to the annual input-price inflation rate; its input price was 51.0% higher than a year earlier and rose 14.0% in September alone. For output prices, coke and refined petroleum products made the largest upward contribution. Their prices were 63.3% higher over the year and rose 9.1% during September.
The ONS said the increases in input and output inflation were mainly caused by oil-related products and that the data continue to be affected by the conflict in the Middle East. This is a qualified description of the data, not evidence that the conflict is the sole cause of every price change. The bulletin also identifies other movements: input prices for metals and non-metallic mineral products rose 9.6% annually, while domestic food input prices fell 1.3%. On the output side, food products were 0.6% cheaper than a year earlier and motor vehicles and other transport equipment were down 1.2%.
The third measure in the release covers services sold to UK-based customers. Services producer prices increased by 4.5% in the year to the third quarter, July to September, compared with a revised 4.2% in the second quarter. The annual rate was the highest since the second quarter of 2023. Quarterly services-price growth, however, eased to 0.9% from a revised 1.9% in the previous quarter.
Transportation and storage services provided the largest upward contribution to the annual services rate. Prices in that group rose 10.7% over the year. The ONS linked the rise in “other transportation support services” principally to higher shipping rates and fuel charges resulting from the conflict in the Middle East. Professional, scientific and technical services rose 5.7% annually.
Latest figures remain provisional
The September producer-price estimates and the services estimates for both the second and third quarters are provisional. The latest 12 months of producer-price data and latest four quarters of services data can be revised as further survey returns arrive and are checked. The ONS reported an effective response rate of 82.2% for domestic producer prices in September, compared with 78.9% in September 2025. For services prices, the third-quarter response rate was 78.6%, against 78.1% a year earlier.
These figures describe prices at different points in the business economy; they are not a direct measure of household inflation. They do, however, provide a timely account of changing costs and selling prices among manufacturers and service providers. The divergence between the annual and quarterly services rates also matters: annual growth strengthened, even as the latest quarter-on-quarter increase slowed.
The bulletin was released on 21 October. Its data offer a detailed snapshot rather than a final account: revisions remain possible, and the reported contribution of oil-related products should not be read as a complete explanation of the wider price pattern.
