Prices of raw materials entering British factories rose at their fastest annual pace in nearly a decade in February, statistics showed today.
The Office for National Statistics said today that input prices rose 0.1 per cent on the month in February, less than the 0.5 per cent economists had expected.
But the annual rate hit 10.8 per cent, the highest since April 1995, owing partly to a fall in the same month a year ago.
Output prices rose slightly more than expected on the month, gaining 0.4 per cent compared with forecasts of a 0.3 per cent rise. That left them 2.8 per cent higher than a year ago.
Although soaring input prices, driven mainly by higher oil and commodity prices, have raised concerns that factories will soon have to pass the bulk of those charges to customers, so far that has not been the case.
Policymakers may take solace from the fact that core output prices - which exclude food, beverages, tobacco and petroleum products - rose a modest 0.3 per cent in February, leaving the annual rate steady at 2.6 per cent.