A massive fall in oil prices in the wake of the end of Iraq war helped push down the price of goods leaving Britain's factories last month for the first time since November.
The Office for National Statistics (ONS) said output prices dropped 0.1 per cent on the month in April, to stand 1.7 per cent higher than a year earlier, confounding market expectations of a small rise on the month.
Oil prices tumbled by 18 per cent on the month, the sharpest monthly drop since October 2001. That pushed petroleum product prices down by 3 per cent on the month.
The ONS data said the oil price drop was also responsible for a fall in the prices of raw materials purchased by Britain's factories in spite of a fall in the value of the pound to a six-year low on its trade-weighted basis.
Seasonally adjusted input prices fell 2.8 per cent on the month - the biggest such move since last November - to be only 0.1 per cent higher than a year earlier.
The figures will come as a relief to the inflation-conscious Bank of England - which had been concerned by the sharp rise in oil prices in the months preceding the Iraq war.
Gilts and short sterling futures gained further ground in early dealings on the perception that lower inflation in the pipeline could leave room for the BoE to cut interest rates further.
But analysts warned it was premature to assume that the producer price inflation outlook is benign.