Divergence in inflationary pressures

There was some notable divergence between inflationary pressures across services and manufacturing sectors this month with increasing pressures in services and easing pressures in manufacturing. Highlights from the press release:

• Services on inflation: "Strong inflationary pressures continued across the service sector at the start of 2022. Both input costs and output charges increased at the second-fastest rate since the survey began in July 1996 (exceeded only by November 2021). Survey respondents overwhelmingly noted that higher raw material costs, staff wages and energy bills had led to a repricing of their services."
• Manufacturing on inflation: "A gradual turnaround in raw material availability helped to soften cost pressures during January, as signalled by the weakest rise in purchasing prices since April 2021."
• "With hospitality, leisure and travel all struggling due to Omicron restrictions, this offset resilient growth in business and financial services. Manufacturers outperformed service providers as a sustained turnaround in materials availability led to the fastest rise in production volumes for five months. However, all types of private sector businesses commented on capacity constraints and rising backlogs of work as a result of staff absences in January."