Record rise in factory prices

FACTORY gate prices last month rose at the fastest rate since records began more than 20 years ago, according to official statistics.

Soaring petrol costs, Budget tax hikes on alcohol and tobacco as well as rising steel scrap prices pushed up output prices 1.4 per cent between March and April.

Official figures from the Office for National Statistics revealed that this was the highest monthly increase since records began in 1986.

Price hikes lifted the annual rate of increase to a record 7.5 per cent in the 12 months to April as surging food-product costs added to the pressure.

The gloomy inflation figures increased the pressure on the Bank of England’s monetary policy committee (MPC).

Most economists expect the MPC to cut the interest rate by a quarter point to 4.75 per cent next month.

But the committee may fear that a further cut would stoke UK inflation.