The cost of goods leaving Britain's factories in October rose at its fastest annual pace in nearly nine years as oil prices hit record highs, suggesting inflationary pressures are now working through the supply chain.
The Office for National Statistics said on Monday that non-seasonally adjusted output prices rose by 0.7 percent on the month in October, more than twice the rate expected, taking the annual rate of factory gate inflation to 3.5 percent, its fastest since December 1995.
"It's a horrible set of numbers," said Philip Shaw, chief economist at Investec. "Certainly the Bank (of England) will view this as an upside risk to its inflation projections even though on its own is probably not going to trigger an interest rate move."
Most analysts expect the Bank of England to leave interest rates unchanged at 4.75 percent for the rest of the year but are then split over whether borrowing costs will go up again early next year.
The ONS said the main reason for the rise in output prices was the higher cost of petroleum products. Brent crude hit a record high near $52 a barrel in October.