Official figures show that the price of goods leaving British factories fell in June at the fastest annual rate for almost eight years as oil prices slumped.
Producer prices sank 1.2% in June compared with a year earlier, the Office for National Statistics (ONS) said. That was the sharpest decline in annual terms since December 2001, and compared with market expectations of a 0.8% drop.
Producer prices fell by 0.2% in June from the May figure, the first monthly drop since November 2008, the ONS added. Analysts had forecast a rise.
Despite recent gains, oil prices remain massively below their record peaks of above $147 a barrel struck a year ago, as the global economic downturn has curbed demand for energy.
