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The United Kingdom's manufacturing sector is heating up at a faster rate than forecast by the market, according to the producer price indexes released today by the UK national statistics office.

The PPI input, which captures changes in the average price of a fixed basket of goods and services purchased by the UK Manufactures, rose by 2.0% in January from 0.1% the previous month. Analysts had predicted a much more modest increase of 0.2%. In yearly terms, the PPI input jumped to 8.4% in January, above forecasts of 6.5%, from 6.9% in December.

The PPI output, which measures price changes of goods produced by UK manufacturers, was 0.4% in January, down from December's 0.5%, but still ahead of predictions of a slide to 0.3%. In annual terms, however, the PPI output set a high not seen since December 2008 with an increase of 3.8% in January, above expectations of a 3.7% rise and December's figure of 3.5%