10 October, 2000 Oil inflation hits factories BY STEPHEN KAHN The soaring price of oil added 2.8 per cent to manufacturers' raw material and fuel costs last month. This pushed the year-on-year inflation rate in these items to 14.3 per cent - the biggest rise for 18 years.

Crude oil prices rose 17.1 per cent between August and September taking the annual increase to 71.5 per cent. However manufacturers continue to absorb the bulk of increased costs with prices of finished goods leaving factory gates up by 0.3 per cent in September to stand 2.5 per cent higher than a year ago. This is the same annual rate as in August.

Economists said that there were no particular interest rate implications in the figures because of the subdued inflation picture prevailing on the High Street.

Meanwhile Britain's financial services industry has suffered its biggest slowdown in activity for nearly three years according to the CBI yesterday.

Its latest survey of the sector - conducted in tandem with accountants PricewaterhouseCoopers - suggested that booming mortgage lending was over with the highest number of banks reporting a fall in business since March 1992.

"This decline, combined with the emergence of a sharp downward trend in the volume of business to private individuals, suggests an end to the boom in mortgages," said PwC partner Ian Dilks.Building societies had also reported falls in business volumes, notably on the personal side, he said. ) Express Newspapers, 2000

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-- Martin Thompson (mthom1927@aol.com), October 09, 2000