1:00PM New York, 6:00PM London - U.K. output price annual inflation increase to 5.7% in February. Manufacturing output remains unchanged in the quarter to January.

London stock averages fell driven by commodity stocks that declined on heightened expectation demand for metal will slump as U.S. growth slows. Homebuilders fell after Bovis Home Group reported today that 2007 annual profit fell 6% to £86.9 million.

Market Sentiment

In London trading FTSE 100 stocks dropped 1.24% or 70.8 to 5,629.10. Antofagasta Plc led decliners in the FTSE 100 stocks on the concern that commodities demand will drop as economic growth in the U.S. cools.

Other commodity stocks fell as well. BHP Billiton declined 5.85% and Anglo American Plc shed 4.42%.

Output price annual inflation at 5.7% in February

The Office of National Statistics reported today on its web site that the output price annual inflation was at 5.7% in February, while input price annual inflation jumped from 18.9% the previous month to 19.4% in February.

Month-on-month output prices measure for all manufactured products increased 0.3% in February.

Excluding volatile sectors, out prices had an annual increase of 3%, while on a seasonally adjusted basis the measure climbed 0.2% between January and February.

Month-on-month, the input prices measure of UK manufacturers'' materials and fuels rose 1.3% driven by the rise in crude oil prices, while in seasonally adjusted terms the index climbed 1.7% between January and February.

The ''narrow'' input prices measure, which excludes volatile sectors, rose 8.2% in the year to February and gained 0.9% between January and February.

Manufacturing out falls in 10 out of the 13 sub-sectors

Separately, the Office of National Statistics reported today that manufacturing output slumped in 10 of the 13 sub-sectors in the quarter to January 2008.

While transport equipment industries rose 2.2% in the three months to January, the mining and quarrying sector rose 1.9% and the energy supply sector also fell by the same margin.

Electricity supply output increased by 3.4% in the quarter to January as input fuel for energy generation was switched from gas to coal.

In the three months to January, manufacturing output jumped by 0.4%. While 8 of the 13 sub-sectors increased output, 5 sub-sectors decreased output in the latest month.

Output in machinery and equipment industries increased 2% and output in chemicals and man-made fibres industries rose by 1.4%. Also output for transport equipment industries declined by 1.3% in the latest month.

Total production output decreased by 0.1% between December and January and mining and quarrying output fell by 4.1%. Energy supply output plunged by 0.2%.

U.K. budget to protect poor, environment

Bloomberg news reported today that Chancellor of the Exchequer Alistair Darling on March 12 will announce a budget to the House of Commons to lower utilities bills for the country’s low income consumers. The government is likely to provide tax incentives to companies that buy less polluting cars such as Toyota’s Prius or Honda Motor’s Civic Hybrid.