Factory prices rise

THE prices of goods leaving UK factories rose at a faster pace than expected in December, according to official figures.

UK producer prices rose by 0.5 per cent last month the data from the Office for National Statistics (ONS) showed.

It took the annual rate of output price inflation to 3.5 per cent – the highest rate since January 2009.

Input prices, the cost of materials bought by producers, rose at an annual rate of 6.9 per cent – the fastest rate since November 2008.

Howard Archer, chief UK and European economist at IHS Global Insight said: "We remain dubious that manufacturers will be ably to significantly lift their prices over the coming months given substantial excess capacity and elevated competition amid still challenging conditions.

"While the manufacturing sector appears to be recovering to some extent after a largely dismal 2009, it is still hardly racing ahead."