British firms' input costs rose last month at their fastest annual rate in more than two years and factory gate prices also accelerated, raising pressure on the Bank of England to raise rates sooner rather than later.
The figures suggest pipeline inflation pressures are continuing to build, and will worry BoE policymakers at a time when consumer price inflation is nearly double its 2 percent target and still rising. The Office for National Statistics said producer input prices rose 13.4 percent on the year in January, the biggest rise since October 2008 and well above forecasts for an annual rate of 12.6 percent.
Producer output prices rose 4.8 percent on the year, the highest rate since May 2010 and also above forecasts for an annual rise of 4.4 percent.
Data next week is likely to show consumer price inflation vaulted above 4 percent in January as a rise in value added tax added to pressure from surging oil and commodity prices.
There was little market reaction to Friday's data as investors awaited a raft of economic data next week for clearer pointers on how the economy is faring.
The ONS said the rise in input prices was mainly driven by a 28.8 percent annual rise in the price of crude oil - the biggest increase since May 2010. Rising prices of imported metals and materials also played a role.
The BoE is having to juggle soaring price pressures with a fragile economic recovery and has held interest rates at 0.5 percent for almost two years.
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