Show Hide image

Factory gate inflation rises

Data from the Office for National Statistics (ONS) shows that factory gate inflation soared to a 16-

The figures put pressure on the Bank of England (BoE) to tighten policy to keep inflation in check. Financial markets expect a higher chance that it will raise interest rates earlier than previously thought.

The ONS said producer output prices rose 0.9 per cent this month, compared to February, almost twice the figure analysts had forecast. The March inflation was mainly due to rising oil prices and more expensive imported goods because of a weak pound.

Prices rose at the fastest pace since November 2008, by about 5 per cent year-on-year. The data will raise fears about consumer price inflation, which is presently at 1 percentage point higher than the BoE's target level of 2 per cent.