How do Individual UK Producer Prices Behave?


  • Corresponding author: Philip Bunn, Bank of England, Threadneedle Street, London EC2R 8AH, UK. Email:

  • The views expressed in this article are those of the authors, and not necessarily those of the Bank of England or the BVCA. We thank the ONS for making the data available to us. We are also grateful to Neal Hatch, Steve Millard, Nick Oulton, seminar participants at the Bank of England an anonymous referee for the Bank of England working paper series, two anonymous referees for this Feature and Steve Machin for useful comments. This work contains statistical data from ONS which is Crown copyright and reproduced with the permission of the controller of HMSO and Queen’s Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research data sets which may not exactly reproduce National Statistics aggregates.


This article presents a number of stylised facts about the behaviour of individual UK producer prices. First, on average 26% of prices change each month, although there is considerable heterogeneity between sectors. Second, the probability of price changes is not constant over time. Third, the distribution of price changes is wide, although a significant number of changes are relatively small. Fourth, prices that change more frequently do so by less. Conventional pricing theories struggle to match these results, particularly the marked heterogeneity.