The industrial producer price index increased by 0.6% in April and year-on-year inflation measured by this index increased by 0.1% to 3.7%. Prices were pushed up by rising prices for oil and metals. Previous price rises in agriculture showed up in the increases to food prices. Inflation in industrial producer prices is also likely to move over into consumer prices. When the economy is moving forward at a rate that is greater than its non-inflationary growth potential, the risk of inflation moving over from the production sector to consumer prices is greater. Today’s data are in line with our interest rate hike expectations to see something happening in the near-term weeks or months.