Consumer

Elaine He oversees Bloomberg Gadfly's data visualization work in Europe and also pursues her own columns combining business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

U.K. manufacturers have weathered Brexit like a champion, turning in a burst of growth since the fallout from June's referendum abated. A weakened pound and long stretch of cheap oil have helped producers stay competitive.

But a squeeze is undeniably in train. The latest official producer price figures show that raw material costs jumped an annual 12.2 percent in October.

U.K. Inflation Snapshot
Producers' raw material costs have soared much faster than other price measures since the Brexit vote
Source: U.K. Office for National Statistics
Annual percentage changes

Energy costs were the biggest contributor to higher input prices.

Big Bump
Crude oil surged in the last two years to become the highest contributor to U.K. producers' input prices
Source: U.K. Office for National Statistics
Year on year changes Five largest contributors

Here, the weak pound is proving a drag, chipping away at the benefit from lower levels of dollar-denominated oil.

Brexit Premium
The gap between pound and dollar denominated crude-oil prices widened after June's referendum and sterling plummeted
Source: Bloomberg

The question for British factories is their capacity to absorb these higher costs, or pass them along at the factory gate. While output prices haven't risen nearly as much, climbing just 2.1 percent, that's still the fastest pace since April 2012.

The overall report is a bad omen for consumer price inflation. The trials of the Toblerone chocolate bar suggest shoppers won't be able to avoid the pinch. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Elaine He in London at ehe36@bloomberg.net

To contact the editor responsible for this story:
Jennifer Ryan at jryan13@bloomberg.net