Official figures show that British manufacturing output prices fell in August at their sharpest monthly rate since records began in 1986. This was because of lower petrol and scrap metal prices.
The Office for National Statistics said unadjusted output, or factory gate, prices fell 0.6% in August, taking the annual rate of increase down to 9.7% from 10.3%.
Core output prices, which exclude food, drink, tobacco and petroleum fell 0.1%, the first monthly drop in nearly three years.
Manufacturers' raw material costs also fell by more than expected last month with input prices dropping a seasonally adjusted 2% on the month, thanks to falls in crude oil, fuel, wheat and metal prices. July's drop was also revised to show a steeper fall.
After months at which producer prices have been soaring at record rates, the latest data are likely to boost expectations that falling oil prices and slowing economic growth will slow Britain's headline inflation rate over the next year.
