--UK Jan unadj producer output prices -0.4% on mo; +1.9% on yr
--UK Jan adj core output prices -0.1% on mo; +0.6% on yr
--UK Jan adj prod input prices +0.5% on mo; +6.3% on yr
--UK Jan unadj core output prices unch on mo; +0.6% on yr
--UK Jan unadj prod input costs -0.1% vs mo; +6.2% on yr
--ONS says UK Jan output price fall on mo biggest since May 1986
--ONS: UK Jan output price annual rise smallest since Oct 1999
--ONS: UK Jan output prices dn on mo mainly on lower fuel costs

By BridgeNews
London--Feb. 12--U.K. factory gate prices fell unexpectedly in January, and at the fastest rate seen since May 1986, National Statistics said on Monday.
Prices fell 0.4% on the month and rose 1.9% on the year, compared with a fall of 0.2% on the month and a rise of 2.4% on the year in December. Input prices rose by more than expected from December but the annual rate remained below forecast. Crude oil and fuel costs remained the key factors in both measures of inflation.
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The annual rate of output price growth is now the lowest since October 1999. Analysts had expected output prices would be unchanged from December and up 2.4% on the year. The ONS said the lower outturn was mainly accounted for by lower fuel costs, but pointed out that higher food prices had partially offset the decline.
Core output prices were also weaker than expected, falling 0.1% on the month and rising 0.6% on the year, against expectations of prices being flat on the month and rising 0.7% on the year.
Input prices in contrast were more mixed, rising by a stronger than expected 0.5% on the month against the 0.1% forecast, but a weaker annual rise of 6.3% against the 6.9% forecast. The main increases came from food prices and other imported materials like textiles.
The cost of imported materials as a whole fell by 0.1% on the month and rose 7.0% on the year in January. The trade-weighted sterling exchange rate index fell 2.2% on the month and fell 3.6% on the year in January, suggesting that the bulk of the downward effect on import prices came from the lower cost of crude. Imported materials and crude oil together make up 69% of the overall input index.
There are no immediate policy implications from the release, given that the Bank of England cut interest rates on Feb. 8.