The price of goods leaving US factories soared for a second month in February as producers jacked up prices amid rising oil costs. Wholesale prices rose 1.0pc in February from January following a 1.6pc increase in January, as energy prices jumped 7.4pc, the biggest increase since the build up to the Gulf War in 1990. Analysts had expected the headline producer price index to rise by 0.6pc in February. Core prices, which excludes volatile food and energy prices, fell 0.5pc, the Labour Department said.
High energy costs are also impacting on margins at European manufacturers. In the UK, manufacturers' raw material costs soared 1.4pc in February, reflecting a 2.3pc increase in oil prices. However, output costs rose just 0.3pc, indicating that companies are being forced to absorb higher energy costs amid weak demand. Meanwhile, in a separate report, the Commerce Department said that the current account deficit widened to a record USD137bn in the fourth quarter 2002, up from a revised USD126.3bn deficit in the third quarter. The annual current account deficit widened to a record USD503.4bn last year from USD393bn in 2001. ///www.fxcentre.com