RAW material costs for UK manufacturers rose at their fastest pace in more than four years during January, official figures showed.

The 3.4 per cent month-on-month increase in input prices was twice as strong as City analysts had been expecting, and followed a 14.8 per cent rise in crude oil prices and a 2.3 per cent hike in the cost of imported goods.

Manufacturers were unable to recover the higher costs as factory gate prices fell by 0.1 per cent on January, the Office for National Statistics added.

Analysts said the hike in raw material costs - the largest since May 2000 - increased the chances of an interest rate rise later in the year.

However, Jonathan Loynes, chief UK economist at Capital Economics, said: "There is some evidence that factory gate inflation has peaked and is now falling. Along with the strength of competitive pressures in the high street, this should ensure that goods inflation at the retail level remains weak."

Figures released today are expected to show a slight weakening in CPI inflation to 1.5 per cent, from 1.6 per cent in December.