The inflation rate of goods leaving the factory gate has fallen for the first time in six months, providing some long-overdue good news for the Bank of England as it prepares its key inflation forecasts.

Output prices rose by 0.5 per cent in April, less than the previous month and taking the annual rate down to 2.5 per cent from 2.7 per cent in March, official data showed yesterday.

The data encouraged hopes that today’s consumer price index, the Bank’s target measure of inflation, could fall back from the 3.1 per cent level that it reached in March – the highest level since the Bank took control of interest rates in 1997.

The Bank’s Monetary Policy Committee, which will set out its detailed forecasts and thinking in tomorrow’s quarterly Inflation Report, will be encouraged by the news that core output price inflation fell back to 2.4 per cent in April, from a figure of 2.7 per cent the month before. although analysts said that the figure was still high.

BACKGROUND

• Will further interest rate cuts boost the housing market next year?

• A guide to the housing market forecasts

• The property market: a bleak future?

BACKGROUND

• All set for slowdown

• Homes in N Ireland rise 54% to London levels

• House prices: top hotspots ... and the coolest

• What do Chelsea and Belfast have in common?

The London property market

BACKGROUND

• Is the property boom finally over?

First-time buyers priced out

Houses will become completely unaffordable for first-time buyers unless many more are built, a national advisory unit says

• Reform of planning rules ‘vital’ to meet growth in demand

• How the mortgage market has changed

• The future of house prices: 10 times pay

BACKGROUND

• Property prices grow at slowest rate in five months

• Buying a house 'will cost 10 times your income'

• How the mortgage market has changed

• First proof of decline in housing market

• Buy-to-let brigade could be the joker in pack

No one is suffering as much as first-time buyers

Lenders are getting more picky, yet property prices are refusing to fall far enough, fast enough

BACKGROUND

• First proof of decline in housing market

• Fresh signs of cooling housing market

• House prices slow despite London surge

BACKGROUND

• Mortgage slowdown triggers house price fears

• Buy-to-let tax shock

• Fall in mortgages raises fears of slowdown

• Signs emerge that UK housing is off the boil

• Interest rates put brake on house prices

End of house price boom is in sight

Societies saw an 8% drop in mortgage approvals last month compared with a year ago, the first such fall since 2005

BACKGROUND

• Nationwide says slowdown may limit price rise

• House prices keep on rising

• Your guide to surviving the rate hike

• The return of negative equity?

Housing costs taking their toll

The question that always accompanies fresh data showing a fast-growing housing market is: are we headed for a crash?

The weaker reading was caused by a reversal of a sudden rise in scrap metal costs and a sharp drop in the cost of motor vehicles, according to the Office for National Statistics.

Paul Dales, of Capital Economics, said: “April’s producer prices data provided some tentative evidence that manufacturers are finding it harder to make price rises stick, but it is far too soon to conclude that pipeline price pressures have peaked.”

Manufacturers’ input prices fell by 0.3 per cent year on year, the data showed. This was despite a 5.6 per cent rise in the price of crude oil products in April.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive