Price inflation for all manufactured goods reached its highest rate in 16 years in December, prompted by higher fuel and food costs, according to the Office for National Statistics (ONS).
Annual output price inflation rose to five per cent last month, up from 4.5 per cent in November, the highest rate of inflation on prices charged by manufacturers since August 1991, when it reached 5.2 per cent.
Analysts had expected factory gate price inflation to rise but at a more modest level, to around 4.6 per cent.
However, analysts maintain that interest rates are set to be cut in February. The Bank of England’s Monetary Policy Committee kept the key UK interest rate at 5.5 per cent last week following December’s cut.
Meanwhile, input price annual inflation rose from 10.9 per cent in November to 11.3 per cent in December.