BANK of England policymakers were boosted in their fight against inflation yesterday after the pace of factory gate prices eased last month.

Prices increased by 0.2 per cent, compared with a revised 0.3 per cent rise in June, while input costs fell during the month, Office of National Statistics figures revealed.

Economists said the figures - more muted than recent surveys showing high levels of pricing confidence among manufacturers - would be "relatively reassuring" to rate-setters on the bank's Monetary Policy Committee (MPC).

The figures come in a busy week for economic data featuring inflation and retail sales figures, as well as minutes from the MPC's latest meeting, where interest rates were held at 5.75 per cent. The overall output price index rose 2.4 per cent in the year to July, compared with a rise of 2.5 per cent in the year to June.

But the figures also showed a 0.5 per cent fall in seasonally adjusted input costs, despite oil prices approaching record highs last month.