FACTORY gate prices fell last month by their fastest rate since records began in 1958, new figures have shown.

The Office for National Statistics said cheaper oil costs pushed output prices down by 0.4 per cent in November, ahead of projections made in the City.

The fall means prices were one per cent below the same month a year ago, the steepest fall for 43 years.

Crude oil prices tumbled in November as the economic slowdown hit demand and Opec postponed a cut in production by its member states.

The cost of Brent crude fell below $20 and shares in BP and Shell plunged on the London market.

Yesterday's figures also showed that the prices manufacturers have to pay for raw materials fell during the month by one per cent.

The drop came despite higher gas and electricity costs and meant input prices were 11.1 per cent below the year before, the biggest annual fall since April 1997.

Analysts said the figures highlight the absence of inflationary pressure in the UK, which they expect to be reflected in inflation numbers out today.

Figures for November are likely to show the underlying rate of inflation fell further below the Chancellor's 2.5 per cent target last month.

The underlying rate was 2.3 per cent in October and could drop to 2.1 per cent.