The net percentage of manufacturers planning to raise prices over the next three months is at its highest seasonally-adjusted level since September 2008, according to the November CBI industrial trends survey. The CBI attributes the increase to pass-through of higher raw material costs; the survey refers to factory-gate prices so should be unaffected by the coming VAT hike.

The CBI balance correlates with CPI goods inflation, suggesting that this would be heading significantly higher into early 2011 even in the absence of the VAT rise – see chart.