British factory gate inflation rose more than expected in January to its highest rate in more than 16 years, data showed today.
The Office for National Statistics said that output prices rose 1.0 per cent on the month last month, taking the annual rate up to 5.7 per cent from 5 per cent. Analysts had expected an annual reading of 5.1 per cent.
Core output price inflation also rose much faster than expected, up 0.8 per cent on the month - the fastest since records began in 1986.
Input price inflation surged higher, up 18.9 per cent on the year in January.
The figures are likely to raise expectations that the Bank of England may not be able to cut interest rates as fast as the market would expect as price pressures continue to build even as the economy slows.
Separate figures showed Britain's trade deficit with the rest of the world came in worse than expected in December at £7.574 billion. Economists had expected a reading of £7.35 billion.