Factory gate inflation in surprise rise

City A.M. Reporter
Factory gate inflation unexpectedly accelerated in March to its highest since October 2008 after strong rises in the cost of petroleum and food, official data showed.

The Bank of England kept interest rates at a record low this week but evidence of building price pressures is a worry at a time when consumer price inflation is already double its target.

The Office for National Statistics said producer output prices rose by 5.4 per cent, confounding expectations of a slowdown to an annual 5.1 per cent.

Input price inflation eased to an annual rate of 14.6 per cent, down from an upwardly revised February reading of 14.9 per cent, which was the highest since October 2008.

This compares with forecasts for an annual rate of 12.5 per cent.

Stripping out the effect of rising food and petroleum prices, core output price inflation slowed slightly to three per cent from 3.1 per cent.

Crude oil prices jumped 9.8 per cent on the month, their biggest rise since March 2010.