British factory gate inflation picked up to its highest rate in four months in December, official statistics showed today.
The Office for National Statistics said that output prices rose 0.2 per cent in December, taking the annual rate to 2.2 per cent from 1.8 per cent, as expected.
Core output price inflation rose 0.1 per cent on the month. Analysts had predicted a 0.2 per cent rise.
Seasonally adjusted input prices rose by 0.1 per cent, slightly weaker than expected, but big revisions to the November data meant the annual rise was above forecast at 1.9 per cent, the weakest since March 2004.
The figures are unlikely to settle the debate over where borrowing costs go next after the Bank of England's shock interest rate rise last week.
Financial markets showed little reaction to the data, as investors wait for consumer price inflation figures on Tuesday for more information on rate outlook.