High fuel prices send factory inflation soaring

Rising fuel costs helped push British manufacturers to hike their prices in March at the fastest rate since 1991.

The factory gate price rises followed the strongest increases in costs for manufacturers since records began in 1986.

According to figures from the Office for National Statistics (ONS), manufacturers' costs soared at a record 20.4 per cent annual pace, while the cost of goods leaving factories rose at 6.2 per cent.

Over the same period in the 12 months to March, the input price index, which monitors the costs that companies pay to manufacture their goods, accelerated primarily because of rising fuel costs.

The stronger than expected figures, which the Bank of England did not see before it cut interest rates to 5 per cent last week, increased the pressures on policymakers this year as the economy slows but inflation accelerates.

Image: Rising fuel prices caused manufacturers to increase the cost of their goods

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