Factory gate inflation eases

British factory gate inflation slowed unexpectedly in November after petrol prices rose less quickly than the same time a year ago, official data showed.

The Office for National Statistics said annual producer output price inflation slowed to 3.9 per cent in November from 4.0 per cent in October, confounding forecasts for a pick-up to 4.1 per cent.

No input price data was available, however. The ONS said it was delaying the publication of these figures until 13 December due to "potential errors".

Nonetheless, Friday's data should provide some reassurance to the Bank of England that pipeline inflationary pressures are easing even though a rise in VAT next year is likely to keep consumer price inflation well above the Bank's two per cent target.

"It could be a sign that factory gate inflation is past its peak, which would at least be helpful for goods price inflation at the CPI level if that trend were to be maintained," said Philip Shaw,