The price of materials used by UK factories are rising at the fastest pace on record in a sign that consumers could soon be spiked by a further inflation surge, fresh figures published today reveal.
Input prices soared just over 22 per cent over the year to May, the fastest acceleration since the Office for National Statistics (ONS) started tracking the data in 1985.
That cost hike led factories to lift output prices nearly 16 per cent annually in an attempt to protect margins.
Higher operating costs for manufacturers may raise consumer inflation by incentivising businesses along the supply chain to lift prices.
Food and energy retailers are among the businesses most likely to raise prices due to their suppliers being hit hardest by rising crude oil and basic foodstuff inflation.
Figures published earlier this week by Kantar revealed the average food shop jumped nearly £400, illustrating households are already being squeezed by higher basic goods bills.
Consumer inflation edged higher to a new 40-year high of 9.1 per cent last month, up from April’s nine per cent reading.
The Bank of England expects inflation to top 11 per cent in October when the energy watchdog raises the cap on bills again.
But, similar to the separate consumer price index released by the ONS, there are signs of inflationary pressures easing.
On a monthly basis, input prices climbed 2.1 per cent, down from 2.7 per cent. Output price growth also receded, but was still positive.
UK factories are not the only ones being spiked by soaring costs. Data published earlier this week showed producer price inflation in Germany topped 33 per cent, its highest rate since records began in the 1940s.