Manufacturers' input costs rose at their fastest annual rate in more than two years in January, led by sharp increases in the cost of oil and imported metals and materials, official data showed.
The Office for National Statistics said producer input prices rose 13.4 percent on the year in January, the biggest rise since October 2008. That compared with a revised 12.9 percent in December and was well above forecasts for an annual rate of 12.6 percent.
Producer output prices rose 4.8 per cent on the year, the highest rate since May 2010 and also above forecasts for an annual rise of 4.4 per cent.
The figures are likely to worry Bank of England policymakers at a time when consumer price inflation is already nearly double its 2 percent target.
The rise in input prices was mainly driven by a 28.8 percent annual rise in the price of crude oil –the biggest increase since May 2010.
Prices of imported metals and materials also contributed to the upward pressure.
The Bank of England voted to hold interest rates at 0.5 per cent at its monthly meeting on Thursday, but some economists think that it may use next week's quarterly inflation forecasts to prepare the ground for an increase in the coming months.
City A.M. Reporter