To support his case, he cited his own experience in purchasing a shed for his garden, having been advised to get his order in quickly as prices were about to go up by 10%.
Whilst, I cannot vouch personally for conditions in the shed industry, I certainly would take issue with the suggestion that this in any way is representative of the manufacturing sector as a whole, never mind the wider economy.
A closer look at the latest producer prices figures serves to illustrate my point. Although the output prices data surprised on the upside in February, the single biggest upward factor was again recovered secondary raw materials prices (up 10.7% on the month), reflecting rampant demand for scrap metal from China. This alone accounted for more than half the 0.5% February increase in core output prices. However, this sub-sector represents just 0.632% of manufacturing. Thus, whilst there clearly is abundant evidence of pricing power in this tiny part of manufacturing, the same most definitely cannot be said for the overwhelming majority of the sector.
Indeed, for the remaining 99.368% of UK manufacturing, core producer output prices increased by less than 0.2% on the month, with the headline measure rising by less than 0.1%.
Talk of UK manufacturers (shed-builders aside) being able to raise prices in an attempt to expand margins would appear therefore to be a tad overblown.
Consequently, and with retailers unable to push up prices because of competitive pressures, we are sticking with our view that headline consumer price inflation is going to fall like a stone this year. From 2.8% in February, CPI inflation will be down to around 1.5% by the end of 2007.