Factory gate inflation eased to a two-year low in March, official data showed on Friday, supporting hopes that price pressures are falling back as the Bank of England predicts.
However, output and input price inflation slowed less than analysts had forecast, highlighting the risks to the central bank's prediction that consumer price inflation will fall below its two per cent target this year.
Separate data from the Office for National Statistics showed that non-seasonally adjusted construction output rose 6.1 per cent in February. Despite that rise, risks remain that construction has been a drag on first quarter growth as output had slumped 12.9 per cent in January.
The ONS said producer output inflation eased to 3.6 per cent in March, the lowest annual rate since January 2010. That was down from the 4.1 percent recorded in February but still above the 3.4 percent economists had forecast.
Input prices were 5.8 per cent higher on the year, compared with forecasts for an annual increase of 4.6 per cent, but at their lowest level since November 2009.
City A.M. Reporter