A survey has shown that British manufacturers pushed up prices at the fastest rate on record in February as growth in the sector edged up.
Such a strong signal that companies are seeking to pass on surging raw materials and energy costs to customers is likely to worry the Bank of England as it tries to steer the UK economy away from a sharp slowdown.
The CIPS/NTC purchasing managers' index picked up to 51.3 last month, just above forecasts, from 50.7 in January. A reading above 50 indicates expansion.
The output price index jumped to 59.9 from 57.9 in January, the strongest inflation in prices charged to customers since the series began in 1999. There was no let-up in inflationary pressures, with the input prices index rising to 72.2 last month from 69.7 in January - the strongest cost inflation since November 2004.
'Almost half of the survey panel reported a rise in their purchasing costs, which they attributed to high prices for chemicals, energy, food products, metals, oil and plastics,' CIPS/NTC said.
British manufacturers are also feeling the impact of the global credit crunch, with new export orders contracting for the second month in a row as demand cooled from Europe, the US and Asia.
