Soaring food and petrol prices pushed British factory gate inflation to its highest level in nearly 12 years in October.
The Office for National Statistics (ONS) said on Monday that output prices rose a non-seasonally adjusted 0.6 per cent on the month, taking the annual rate up a full point to 3.8 per cent - its highest level since December 1995.
Analysts had predicted a 3.3 per cent annual increase. The ONS also revised up September's figures and there was further evidence of inflationary pressure further up the pipeline.
Manufacturers' raw material costs rose by 1.8 per cent in October for an annual increase of 8.5 per cent, the fastest annual pace since July 2006.
Sterling rose about a third of a cent against the dollar after the data, highlighting policymakers' concerns that inflation is still a problem.
The Band of England (BoE) has come under pressure to cut interest rates in response to continuing troubles in financial markets but held borrowing costs steady at 5.75 per cent last week.
Experts are now waiting for this week's inflation figures - consumer price data are due tomorrow - and new BoE forecasts to gauge the likelihood of a cut in the coming months.